The Following Current Year Information Is Available from a Manufacturing

question 60

Essay

The following current year information is available from a manufacturing company:
$\begin{array}{|l|r|}\hline \text { Sales } & \$ 640,000 \\\hline \text { Gross profit on sales } & 276,000 \\\hline \text { Operating income } & 64,000 \\\hline \text { Income before taxes } & 44,000 \\\hline \text { Net income } & 33,600 \\\hline \text { Accounts receivable, beginning-year } & 58,000 \\\hline \text { Accounts receivable, end-of-year } & 70,000 \\\hline\end{array}$ Calculate the company's accounts receivable turnover and its days' sales uncollected.

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Definitions:

Cash Flows

The total amount of money being transferred into and out of a business, especially affecting liquidity.

Capital Rationing

The process by which a company or organization allocates limited capital resources among various possible projects or investments.

Financial Resources

Assets in the form of money or other valuables that individuals or organizations can use to conduct transactions or invest.

NPV

Net Present Value represents the difference between the present value of cash inflows and the present value of cash outflows over a period of time.