Conclusion regarding the firm payment behavior

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Reference no: EM13973201

Collen Bakery purchases flour from a mill on a regular basis. The monthly purchase scheduling and ending payables is provided below.


Dec

Jan

Feb

Mar

Apr

May

June

Purchases

25

45

80

120

100

90

50

Ending payables


50

60

80

85

70

50

a. Calculate the day's purchases outstanding for March, April, May, and June using quarterly purchases to calculate the average daily purchases.

b. What is your conclusion regarding the firm's payment behavior?

c. Below is presented a table showing the amount of payables remaining in successive months for purchases made during the January through June period of operations. Convert the table to a balance fraction matrix and discuss the firm's payment pattern as represented by the balance fraction table.

d. What is your conclusion about the firm's payment pattern?


Purchases

Jan

Feb

Mar

Apr

May

June

Jan

45

20

22





Feb

80


38

20




Mar

120



60

30



Apr

100




55

17


May

90





53

15

June

50






35



NA

60

80

85

70

50

Account Payables Balances

Reference no: EM13973201

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