The Tom Company reports the following data:
Determine Tom Company's operating leverage.
Definitions:
Average Collection Period
The average amount of time it takes for a business to receive payments owed by its customers for goods or services sold on credit.
Net Sales
The total revenue from sales of goods or services, less returns, allowances for damaged or missing goods, and discounts.
Annual Interest Rate
The percentage rate charged on a loan or paid on an investment over a one-year period.
Total Interest
The amount of interest payable over the life of a loan or financial instrument, calculated as the sum of all interest payments.
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