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Recievables Turnover

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The company with sales of$1,034,550 has recievables of $267700 and the industry's average collection period of 65 days. Calculate the firms average collection period, and compare it to the industry average. If the firms receivables turned over as fast as the industry average, how much would the company's receivable be reduced, and how much that company save in interst expense. Assume the cost of carrying the receivables is 9%.

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Solution Summary

The expert calculates the reduction in receivables and the savings in interest cost when the receivables turnover ratio is increased.

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The company with sales of $1,034,550 has recievables of $267700 and the industry's average collection period of 65 days. Calculate the firms average collection period, and compare it to the industry average. If the firms receivables turned over as fast as the industry average, how much would the company's receivable be ...

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