The Brenmar Sales Company
The Brenmar Sales Company had a gross profit margin (gross profits divided by ÷ sales) of 28 percent and sales of $9.4 million last year. 74 percent of the firm’s sales are on credit, and the remainder are cash sales. Brenmar’s current assets equal $1.4 million, its current liabilities equal $295,800, and it has $104,300 in cash plus marketable securities.
a. If Brenmar’s accounts receivable equal $563,000, what is its average collection period?
b. If Brenmar reduces its average collection period to 25 days, what will be its new level of accounts receivable?
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c. Brenmar’s inventory turnover ratio is 9.4 times. What is the level of Brenmar’s inventories?
a. If Brenmar’s accounts receivable equal $563,000, what is its average collection period?
The company’s average collection period will be ____ days. (Round to two decimal places.)
