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(Efficiency analysis) The Brenmar Sales Company had a gross profit margin (gross profits /sales) of 25 percent and sales of $9.5 million last year. 74 percent of the firm’s sales are on credit, and the remainder is cash sales. Brenmar’s current assets equal $1.4 million, its current liabilities equal $295,500 and it has $100.500 in cash plus marketable securities.

a. If Brenmars accounts receivable equal $562,800 what is its average collection period?

b. If Brenmars reduces its average collection period to 20 days, what will be its new level of accounts receivable?

c. Brenmars inventory turnover ratio is 8.4 times. What is the level of Brenmar’s inventories?

The company’s average collection period will be _____days (Round to two decimal places)

Reference no: EM13876083

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