Regression and receivables

Assignment Help Financial Management

Reference no: EM131177513

Edwards Industries has $280 million in sales. The company expects that its sales will increase 20% this year. Edwards' CFO uses a simple linear regression to forecast the company's receivables level for a given level of projected sales. On the basis of recent history, the estimated relationship between receivables and sales (in millions of dollars) is as follows:

Receivables = $14.75 + 0.06(Sales)

Given the estimated sales forecast and the estimated relationship between receivables and sales, what are your forecasts of the company's year-end balance for receivables? Enter your answer in millions. For example, an answer of $25,000,000 should be entered as 25. Round your answer to two decimal places.

$ million

What are your forecasts of the company's year-end days sales outstanding (DSO) ratio? Assume that DSO is calculated on the basis of a 365-day year. Round your answer to two decimal places.

days

Reference no: EM131177513

Questions Cloud

Advise connor of their legal rights and obligations : Advise Connor, Dolly, Eileen, and Fiona of their legal rights and obligations in relation to the above matters, Connor urgently needed cash. So he decided to sell his car by parking it outside his house with a notice on the windscreen stating: "For..

What is the effective interest cost to the borrower : John wants to buy a property for $105,000 and wants an 80% loan. The lender indicates that a fully amortizing loan can be obtained for 30 years at 12% MEY, with loan origination fees (all lender controlled fees) of $3,500. How much will the lender ac..

World trade organization international trade : The World Trade Organization International Trade Statistics is an annual report that provides comprehensive, comparable, and updated statistics on trade in merchandise and commercial services. The report allows an assessment of world trade flows b..

What would you advise nummi management to stop doing : What would you advise NUMMI management to stop doing, start doing, or do better? Discuss what are the lessons to be learned about motivation from the practices of NUMMI?

Regression and receivables : Edwards Industries has $280 million in sales. The company expects that its sales will increase 20% this year. Edwards' CFO uses a simple linear regression to forecast the company's receivables level for a given level of projected sales. Given the est..

Function of standing operating procedures : 1. Discuss the function of "Standing Operating Procedures" in law enforcement organizations, what is their purpose? Give one detailed real-life example!

Characteristics of the product from a design perspective : Kindly describe Characteristics of the product/service from a design perspective? - What meaning does Saint Regis Hotel attach to its product/services??

Long-term financing needed : At year-end 2014, total assets for Ambrose Inc. were $2 million and accounts payable were $305,000. Sales, which in 2014 were $2.1 million, are expected to increase by 10% in 2015. Total assets and accounts payable are proportional to sales, and that..

Explain stigma attached to a diagnosis of conduct disorder : Describe the diagnostic criteria for conduct disorder and other common comorbid diagnoses. Explain the stigma attached to a diagnosis of conduct disorder. Examine how a diagnosis of conduct disorder can impact treatment services provided to youth.

User Account

All Pages