Sometimes Vincent Doesn't Have Enough Cash on Hand to Send

question 47

Short Answer

Sometimes Vincent doesn't have enough cash on hand to send in the monthly taxes withheld from his employees' salaries.This could be the result of a single-minded focus on production or because of a casual ____________.___________.

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Definitions:

Average Collection Period

The average number of days it takes for a business to receive payment from its customers for invoices issued.

Total Asset Turnover

A financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue; calculated by dividing sales by total assets.

Fixed-Asset Turnover

A financial ratio that measures a company's efficiency in using its fixed assets to generate sales, indicating how well assets are being managed.

EVA

Economic Value Added is a measure of a company's financial performance based on the residual wealth calculated by deducting its cost of capital from its operating profit, adjusted for taxes on a cash basis.