Based on the Information for the Following Three Companies,a)compute the Number

question 96

Essay

Based on the information for the following three companies,a)compute the number of days' sales in receivables for 2X13 for each company assuming 365 days in a year and b)analyze each company in accordance with a 45-day credit policy.

$\begin{array}{l}\begin{array} { l } &&\text { Hadman }\\\text { Net credit sales }&2 \times 13 & \$ 122,000 \\&2 \times 12 & 120,000 \\\text { Cost of goods sold }&2 \times 13 & 54,000 \\&2 \times 12 & 51,000 \\\text { Accounts receivable }&2 \times 13 & 14,000 \\\text { (ending balance) }&2 \times 12 & 16,000 \\\text { Inventory }&2 \times 13 & 26,000 \\\text { ending balance }&2 \times 12 & 20,000\end{array}\begin{array} { l } \text { Teltor }&\text { Comdok }\\\$ 98,000& \$ 178,000 \\99,000 & 169,000 \\44,000 & 78,000 \\39,000 & 61,000 \\21,000 & 19,000 \\18,000 & 13,000 \\19,000 & 9,000 \\20,000 & 13,000\end{array}\end{array}$

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Definitions:

Diversification

The strategy of allocating investments or resources among various financial instruments, industries, or other categories to reduce risk.

Economic Losses

Financial shortfalls that occur when a firm's total costs surpass its total revenues, leading to a negative profit margin.

Positively Correlated

Describes a relationship between events such that each event is more likely to occur if the other event also occurs.

Diversification

Diversification is an investment strategy that involves spreading investments across various assets to reduce risk and increase the potential for returns.