Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. 7. (12.5 points) use the following simplified 2013

7. (12.5 points) Use the following simplified 2013 balance sheet to show, in general terms,...

70.2K

Verified Solution

Question

Accounting

image

7. (12.5 points) Use the following simplified 2013 balance sheet to show, in general terms, how an improvement in the DSO would tend to affect the stock price. For example, if the company could improve its collection procedures and thereby lower its DSO from 45.6 days to the 32-day industry average without affecting sales, how would that change "ripple through" the financial statements (shown in thousands below) and influence the stock price? $878 1,802 817 $3,497 Debt $1,545 Accounts receivable Other current assets Net fixed assets Total assets Equity Liabilities plus equity 1,952 $3,497 First, we need to calculate XYZ's daily sales Daily sales Sales Daily sales$7,035,600 / Daily sales$19,275.62 365 365 Target A/RDaily sales Target A/R-$19,276 Target A/R$616,820 Target DSo 32 Freed-up cash old A/R Freed-up cash -$878,000 Freed-up cash =$261,180 new A/R $616,820 8. (12.5 points) Provide a brief summary or rationale of how these ratios are used, and why they are important

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Basic Math
1.2K views

Let x represent the dollar amount spent on supermarket impulse buying in a 10-minute (unplanned) shopping...

Biology
1.2K views

The term liability in a business refers to O debt borrowed from the banks O...

Physics
1.2K views

In a potentiometer arrangement a cell of emf 1 25 volt gives a balance point...

Basic Math
1.2K views

Strontium 90 decays at a constant rate of 2.44% per year. Therefore, the equation for...

Calculus
1.2K views

Find the dimensions that produce the maximum floor area for a one story house that...

Accounting
1.2K views

Question 8 Use the following data for Hoffman Model Car Company, determine the...

Accounting
1.2K views

Whichering Winds Corporation produces microwave ovens. The following unit cost information is available: direct materials...

Accounting
1.2K views

how do you find the inventory balance units

Accounting
1.2K views

Dehner Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based...

Accounting
1.2K views

Required information [The following information applies to the questions displayed below.] A manufactured product has...

Finance
1.2K views

Carefully select two mixed funds of your own choice. The first should have a very...

Finance
1.2K views

gif, Inc. is looking at raising additional capital for a future project. For gif, Inc....