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?
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.)
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