Horizontal common-size analysis for sales

Assignment Help Accounting Basics

Reference no: EM131002059

The Grand retail firm reported the following financial data for the past several years:

Year

(Amounts in 000s)	5	4	3	2	1
Sales	$1,254,131	$1,210,918	$1,096,152	$979,458	$920,797
Net accounts receivable	419,731	368,267	312,776	72,450	230,427

The Grand retail firm had a decentralized credit operation allowing each store to administer its credit operation. Many stores provided installment plans allowing the customer up to 36 months to pay. Gross profits on installment sales were reflected in the financial statements in the period when the sales were made.

Required:

a. Using Year 1 as the base, prepare horizontal common-size analysis for sales and net accounts receivable.

b. Compute the accounts receivable turnover for Years 2-5. (Use net accounts receivable.)

c. Would financial control of accounts receivable be more important with installment sales than with sales on 30-day credit? Comment.

d. Comment on what is apparently happening at The Grand retail firm.

Reference no: EM131002059

Questions Cloud

Paper clip industry is perfectly competitive. : Suppose that the paper clip industry is perfectly competitive. Also assume that the market price for paper clips is 2 cents per paper clip. The demand curve faced by each firm in the industry is: Always higher than the firm's MC curve. A horizontal l..

No preferred stock or potential common shares : Compute Renn-Dever's earnings per share as it would have appeared in income statements for the years ended December 3l, 2009, 2010, and 2011.

Significant impact on ratios : Individual transactions often have a significant impact on ratios. This problem will consider the direction of such an impact.

Which stage is asif at : Asif was having difficulty starting a conversation with Janie in person. He found making contact with her via the Internet helpful in starting a conversation with her. According to the developmental model, which stage is Asif at

Horizontal common-size analysis for sales : a. Using Year 1 as the base, prepare horizontal common-size analysis for sales and net accounts receivable. b. Compute the accounts receivable turnover for Years 2-5. (Use net accounts receivable.)

Listed below are the transactions : On November 2, 2012, the board of directors declared a cash dividend of $0.65 per share on its common shares, payable to shareholders of record November 16, to be paid December 2.

Various currency exchange policies effect global trade : Do you think governments (including your own) should be allowed to use monetary easing policies to promote economic growth? (You can refer to your own research or the attached article "Is China Sparking A Global Currency War?". How do the various cur..

What leadership changes will be most important : What are the most significant leadership trends that require a change in leadership approaches by 2020? What leadership changes will be most important?

Compute the cost of goods sold for the year : Compute the cost of goods sold for the year ended December 31, 2007, and the ending inventory under the following cost assumptions:

User Account

All Pages