A Company Currently Allows Its Customers to Take 30 Days

question 29

Multiple Choice

A company currently allows its customers to take 30 days to pay their accounts receivable. Almost all of its customers pay in around 30 days. If a company changes its policy, and allows customers to wait 60 days before paying, it is likely that in future years

• A) Accounts receivable turnover will increase from about 12 to about 24.
• B) Accounts receivable turnover will decrease from about 12 to about 6.
• C) Accounts receivable turnover will increase from around 6 to about 12.
• D) Accounts receivable turnover will decrease from around 6 to around 3.

Explain how the trading of shares impacts a corporation, including the effects on share capital and financial position.

Understand the different reasons a company might issue shares, repurchase its own shares, or undergo a stock split.

Recognize the legal and financial implications of shareholder liability and corporate governance, including the role of the board of directors.

Identify how the market perceives and values a corporation, including market capitalization and the factors influencing share prices.