(Note: Use 365 days as the length of a year in all calculations.) The average DSO for Wok Bar Co.'s industry is 51.7 days. Assuming that its sales stayed the same, what would be Wok Bar Co.'s receivables balance if it maintained the industry average DS07 Based on this information, Wok Bar Co.'s DSO is Wok Bar Co.'s CFO thinks that the company has not done a very good job of enforcing its credit policy. The CFO believes that if the company were to better enforce its credit policy, it would reduce its DSO to 30 days; however, this will cause Wok Bar Co. to lose 6% of its sales revenue. What would Wok Bar Co.'s expected accounts receivables balance be if it decides to tighten its credit policy? O $32,149,152 O $26,025,504 O $33,680,064 O $30,618,240
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first drop down:
credit terms
credit standards
collection policy
Second drop down:
35.54
37.63
41.81
29.27
Third drop down:
53,326,759
50,520,087
61,746,773
56,133,430
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- Effective credit management involves establishing credit standards for extending credit to customers, determining the company’s credit terms, and setting up procedures for invoicing and collecting past-due accounts. The following statement refers to a credit management policy. Select the best term to complete the sentence. How a company handles its credit accounts, including methods of invoicing and collecting past-due accounts, is indicated by the company’s . Consider the case of Three Waters Co.: Three Waters Co.’s CFO has decided to take a closer look at the company’s credit policy. Three Waters Co. has annual sales of $384.4 million, and it currently has an accounts receivable balance of $45.4 million. The first step in analyzing the firm’s credit policy is to determine its days sales outstanding (DSO). Based on this information, Three Waters Co.’s DSO is . (Note: Use 365 days as the length of a year in all calculations.) The average DSO for Three…Effective credit management involves establishing credit standards for extending credit to customers, determining the company’s credit terms, and setting up procedures for invoicing and collecting past-due accounts. The following statement refers to a credit management policy. Select the best term to complete the sentence. The minimum financial strength a customer must have to be granted credit is indicated by the company’s . Consider the case of Universal Exports Inc.: Universal Exports Inc. has a very attractive credit policy, and none of its customers pays in cash when the firm makes a sale. Universal Exports Inc. sells to its customers on credit terms of 1/10, net 30. If a customer bought $150,000 worth of goods and paid the firm cash eight days after the sale, how much cash would Universal Exports Inc. get from the customer? $157,500 $148,500 $120,000 $127,500 If the customer paid off the account after 15 days, Universal…Effective credit management involves establishing credit standards for extending credit to customers, determining the company's credit terms, and setting up procedures for invoicing and collecting past-due accounts. The following statement refers to a credit management policy. Select the best term to complete the sentence. How a company handles its credit accounts, including methods of invoicing and collecting past-due accounts, is indicated by the company's collection policy Consider the case of Mammoth Pictures Inc.: Mammoth Pictures Inc.'s CFO has decided to take a closer look at the company's credit policy. Mammoth Pictures Inc. has annual sales of $396.3 million, and it currently has an accounts receivable balance of $47.6 million. The first step in analyzing the firm's credit policy is to determine its days sales outstanding (DSO). Based on this information, Mammoth Pictures Inc.'s DSO is The average DSO for Mammoth Pictures Inc.'s industry is 51.2 days. Assuming that its sales…
- Effective credit management involves establishing credit standards for extending credit to customers, determining the company's credit terms, and setting up procedures for invoicing and collecting past-due accounts. The following statement refers to a credit management policy. Select the best term to complete the sentence. The conditions of the credit sale, including cash discounts and due dates, are indicated by the company's credit standards Consider the case of Sombra Corp.: Sombra Corp. has a very attractive credit policy, and none of its customers pays in cash when the firm makes a sale. Sombra Corp. sells to its customers on credit terms of 1/10, net 30. If a customer bought $100,000 worth of goods and paid the firm cash eight days after the sale, how much cash would Sombra Corp. get from the customer? $90,000 O $105,000 $82,500 $99,000 If the customer paid off the account after 15 days, Sombra Corp. would receive Approximately 35% of Sombra Corp.'s customers take advantage of…Effective credit management involves establishing credit standards for extending credit to customers, determining the company’s terms of credit, and setting up procedures for invoicing and collecting past-due accounts. The following statement refers to a credit management policy. Select the best term to complete the sentence. The conditions of the credit sale, including cash discounts and due dates, are indicated by the company’s (______) . Consider the case of Newtown Co.: Newtown Co.’s CFO has decided to take a closer look at the company’s credit policy. Newtown Co. has annual sales of $402.8 million, and it currently has an accounts receivable balance of $47.6 million. The first step in analyzing the firm’s credit policy is to determine its days sales outstanding (DSO). Based on this information, Newtown Co.’s DSO is (_____) . (Note: Use 365 days as the length of a year in all calculations. Do not round intermediate calculations. Round your answer to one…Assess the external and internal factors that influence credit policy and decision making within a company that extends credit to its customer when providing a good or service on account. Indicate which factor you believe is most significant in today's business environment. Provide support for your rationale.
- Question: The credit worthiness of a customer is normally checked by the organization's Credit Control Department, before any credit sales is approved. reqiured: state why this process is important?2.-Credit selection involves the application of techniques to determine which customers should receive credit from the company, according to its credit standards. True or false?Working with a company that is able to pay its bills is important. The Balance Sheet is a great place to start when evaluating a company's creditworthiness. Which Balance Sheet accounts would you use to perform your evaluation? How would you use the Balance Sheet to determine creditworthiness?
- Loan structuring is the process of designing a loan to satisfy the financing demands of a business borrower. At the same time, it tries to protect the lender against losses caused by the borrower's refusal to repay the debt, as well as the interest and fees associated with it. Determine the process of credit facilities structuring that takes place in the bank.Which one of the following best defines the term credit scoring? A. Categorizing customers into groups depending on the length of time it takes each customer to pay for purchases B. Compiling a list of accounts receivable segregated by the length of time each receivable has been outstanding C. Evaluating the opportunity costs of a credit policy D. Process of quantifying the probability of default when granting credit to customers E. Tracking of both the number and the size of customer orders over a period of timeThis module discusses discounts given out to customers based on payment terms, such as 2/10, n/30. : What would the credit terms 3/15, n/45 stand for? Explain why it is important for a company to keep track of how much money in discounts is given out? What account is used to track discounts? From a business owner's point of view, what are the advantages of allowing discounts? From a business owner's point of view, what are the disadvantages of allowing discounts?