Homework Answers
a.Normal accounts payable should be squared up either during the discount period, if offered or else by 30 days. This is general better practise followed by companies.
b. The highest debt leverage ratio is 2:1. Anything higher than this ratio signifies threat to the solvency capacity of the company.
c. The ideal dividend payout ratio should be around 35-55 percent. anything below this will make company have lesser retained earnings which is unhealthy.
d. The inventory turnover ratio depends upon the type of business and the type of inventory. However, the general inventory turnover ratio is somewhere around 4 - 6 times.
e. The collection period depends upon the industry of the company. however, companies generally allow 30 days towards credit period.
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4. What factors should a company consider in deciding the following? a. What its accounts payable...
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Suppose a company receives a windfall of cash. What factors should the board of directors consider...
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The following items were taken from the accounting records of a company. Accounts Payable 57,000 Long-term...
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I need this info, what is the ORI, total asset turn over, fixed assets, times interest earned ratio,...
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Annual sales $9,700,000 Cost of goods sold $7,275,000 Inventory $3,200,000 Accounts receivable $1,800,000 Accounts payable $2,400,000 Blue Ostrich's CFO is interested in determining the length of time funds are tied up in working capital. Use the information in the preceding table to complete the following table. (Note: Use 365 days as the length of a year in all calculations, and round all values to two decimal places.) Value Inventory conversion period Average collection period Payables deferral period Cash conversion cycle...
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