Horizontal common-size analysis for sales

Reference no: EM131004093

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: EM131004093

Questions Cloud

Discuss the single most important or surprising lesson learn : Identify at least three (3) key concepts that you have learned in this course, and explain how those concepts will help you in your current or future positions.

Calculate and plot the market demand curve for the project : A project to deepen the river by dredging would reduce the damages for both families.The deeper the dredging, the less the damages.The marginal benefits to each family are given in the table. Plot each family's demand curve for the project. Calcul..

What is your understanding of the sociological imagination : What is your understanding of the Sociological Imagination, and how would you apply it in Everyday Life

Research a recent antitrust case at the department : The best place for finding late-breaking information about antitrust activity is in the "Legal Beat" column of the Wall Street Journal. You can find it inside the Marketplace section. Try to find at least one relevant article and determine the bas..

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.)

What do you think about investing in this manner : What do you think about investing in this manner? What do you know about the relative advantages and disadvantages of this approach to investing?

Identify the optimal number of listings to review : Anthony and Linda are considering buying their own home.They intend to begin the process by conducting an online search of real estate listings.The value of their time in reviewing each listing is $5.The first five listings that appear as a result..

How to you interpret the consumer market data : As a consultant to Dana Wheeler, how to you interpret the consumer market data? What is the expected outcome of each of the targeting scenarios

Value of the firm under two-period perfect certainty model : If you want to consume $723 now, how much would be the value of the firm under two-period perfect certainty model?

User Account

All Pages