Goldsboro Industries Has an Average Accounts Payable Balance of $680,000

question 3

Essay

Goldsboro Industries has an average accounts payable balance of $680,000.Its annual cost of goods sold is $4,500,000,and it receives terms of 1/10,net 40 from its suppliers.Goldsboro chooses to forgo this discount.Is Goldsboro managing its accounts payables well?

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Definitions:

Total Revenue

The total amount of income generated by the sale of goods or services related to the company's primary operations before any expenses are deducted.

Investment In Receivables

The funds tied up in the credit sales of a company, indicating the amount of money owed by customers for goods or services delivered on credit.

Credit Sales

Sales in which the customer is allowed to purchase goods or services with an agreement to pay at a later date.

Average Collection Period

The mean duration required for a company to collect payments due from its clients.