Essay on Financial Management Chapter 3 Homework/Solutions

Financial Management Chapter 3 What is the receivables turnover? (Round your answer to 2 decimal places (e.g., 32.16).) | Receivables turnover | times | Requirement 2: | The days’ sales in receivables? (Round your answer to 2 decimal places (e.g., 32.16).) | Days’ sales in receivables | days | Requirement 3: | How long did it take on average for credit customers to pay off their accounts during the past year? (Round your answer to 2 decimal places (e.g., 32.16).) | Average collection period | days | Explanation: 1. The receivables turnover for the company was: | Receivables turnover | = | Credit sales / Receivables | Receivables turnover | = | $7,535,050 / $446,516 |†¦show more content†¦The ROE for the company is: | ROE | = | Net income / Equity | ROE | = | $13,559 / $64,200 | ROE | = | 0.2112 or 21.12% | The computation of the plowback ratio: | b = 1 – 0.42 | b = 0.58 | The sustainable growth rate is: | Sustainable growth rate | = | [(ROE)(b)] / [1 – (ROE)(b)] | Sustainable growth rate | = | [(0.2112)(0.58)] / [1 – (0.2112)(0.58)] | Sustainable growth rate | = | 0.1396 or 13.96% | Kaleb’s Karate Supply had a profit margin of 12 percent, sales of $21.8 million, and total assets of $9.3 million. | Requirement 1: | What was the total asset turnover? (Round your answer to 2 decimal places (e.g., 32.16).) | Total asset turnover | | times | Requirement 2: | If management set a goal of increasing total asset turnover to 2.75 times, what would the new sales figure need to be, assuming no increase in total assets? (Do not include the dollar sign ($). Enter your answer in dollars, not millions of dollars (e.g., 1,234,567).) | Sales | $ | Explanation: 1. The total asset turnover is: | | Total asset turnover = Sales / Total assets | Total asset turnover = $21,800,000 / $9,300,000 = 2.34 times | 2. If the target total asset turnover is 2.75, we can use theShow MoreRelatedCct 300B. Intermediate Accounting . Course Information1686 Words   |  7 Pageschung@csulb.edu Office Hours: TTH,12pm – 1:30pm; or by appointment. 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