Explore BrainMass

Explore BrainMass

    How to manage receivables

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Miranda Tool Company sells to retail hardware stores on credit terms of "net 30." Annual credit sales are $18 million and are spread evenly throughout the year. The company's variable cost ratio is 0.70, and its accounts receivable average$1.9 million. Using this information, determine the following for the company:

    a. Average daily credit sales
    b. Average collection period
    c. Average investment in receivables

    Assume there are 365 days per year.

    © BrainMass Inc. brainmass.com June 3, 2020, 6:25 pm ad1c9bdddf
    https://brainmass.com/business/business-management/receivable-management-example-problem-59365

    Solution Preview

    a. Average daily credit sales = Annual sales/360=(18000000/365)= $49315

    b. Average ...

    Solution Summary

    The solution discusses various tools to manage the receivables.

    $2.19

    ADVERTISEMENT