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3 years ago

The following information was taken from Nash Inc.'s trial balances as of December 31, 2018, and December 31, 2019.

Business

1 answer:

Elina [12.6K]3 years ago

8 0

Answer:

1. Calculate the net profit margin and accounts receivable turnover for 2019

Net profit margin = Net income/Net sales

Net profit margin = 36,000/(219000-4000)

Net profit margin = 16.74%

A/R turnover = Sales/Average turnover

A/R turnover = (219000-4000)/((32000+39000)/2)

A/R turnover = 6.06

2. How much does Nash make on each sales dollar?

= 36,000 / (219000-4000)

= 36,000 / 215000

= $0.17

3. How many days does the average receivable take to be paid (assuming all sales arc on account)?

Days Sales Outstanding = Average account receivables*365 / Net credit sales

Days Sales Outstanding = [((32000+39000)/2)*365] / (219000-4000)

Days Sales Outstanding = 12957500/215000

Days Sales Outstanding = 60 days

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