The three factors used to determine a company’s credit rating are its current ratio, its debt-to-equity ratio, and its interest coverage ratio.
<u>Explanation:</u>
- A credit rating comes in the list of the company’s annual performance targets. It helps to decide the company’s current year progress.
- A company’s debt-to-equity ratio is used to know the debt of a company as compared to the total equity. If this ratio is high, the company is taking on much debt.
- The current ratio marks a way to compute the liquidity of the company. It shows how well a firm is placed to meet the short term obligations. Broadly, a 2-1 ratio is considered a good ratio.
- The interest coverage ratio tells how well the company may pay its future loan payments. If the ratio is higher than 3-to-1, it suggests that the company is in a good position to make future payments.
Answer: $1000
Explanation:
First, we calculate the amount if bad debt expense which will be:
= 3% × $50000
= $1500
Therefore, the balance of accounts receivable at the end of the first year will be:
= Amount of bad debts expense - Account written off
= $1500 - $500
= $1000
Group of answer choices.
A. the supply curve, resulting in a lower equilibrium price.
B. the supply curve, resulting in a higher equilibrium price.
C. the demand curve, as consumers try to economize because of the shortage.
D. the demand curve, resulting in a price ceiling in the market.
Answer:
B. the supply curve, resulting in a higher equilibrium price.
Explanation:
In this scenario, a severe freeze has damaged the Florida orange crop. Thus, the impact on the market for orange juice will be a leftward shift of the supply curve, resulting in a higher equilibrium price.
An equilibrium price can be defined as the price at which the quantity of goods demanded is equal to the quantity of goods supplied.
Additionally, the equilibrium price is generally said to be stable because at this price, the quantity of goods or services demanded is equal to the quantity of goods or services supplied to the consumers.
Answer:
positive public image, attracting more customers
Explanation:
Answer:
43 days
Explanation:
The first step is to calculate the account receivable turnover
= $595,000/($80,000+$60,000)/2
= 595,000/140,000/2
= 595,000/70,000
= 8.5
Therefore the average collection period can be calculated as follows
= 365 /8.5
= 42.9
= 43 days
