A firm has sales of $3 million, and 10 percent of the sales are for cash. The year-end accounts receivable balance is $285,000. What is the average collection period? (Use a 360-day year.)
The average collection period of the firm is 38 days.
The balance sheet for Stud Clothiers is shown below. Sales for the year were $2,400,000, with 90 percent of sales sold on credit.
Balance sheet 20X1
Liabilities and Equity
Bonds payable (long term)
Plant and equipment
Paid in capital
Total LIbilities and Equity
Compute the following:
a. Current ratio
Amigo Software Inc. has total assets of $889,000, current liabilities of $192,000, and long-term liabilities of $154,000. There is $87,000 in preferred stock outstanding. Thirty thousand shares of common stock have been issued.
a. Compute book value (net worth) per share.
b. If there is $56,300 in earnings available to common stockholders and the
firm’s stock has a P/E of 23 times earnings per share, what is the current price of the stock?
c. What is the ratio of market value per share to book value per share? (Round
to two places to the right of the decimal point.)
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