100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Previously searched by you
Previously searched by you
logo
D076 Unit 4 $10.79   Add to cart
Quickly navigate to
Preview
  2.  
  3. WGU
  4.  
  5. WGU

Exam (elaborations)

D076 Unit 4
 0 view  0 purchase
  • Course
  • WGU
  • Institution
  • WGU

Firm A has an average collection period of 67 days, and the industry norm is 40 days. What can the firm do in order to be competitive with accounts receivable management in the industry? - Tighten the credit standards for its customers. MiniCo recently spun off of BigCo. Both companies have the ...

[Show more]

Preview 1 out of 3  pages

Document information

  • February 2, 2024
  • 3
  • 2023/2024
  • Exam (elaborations)
  • Questions & answers

Subjects

  • d076 unit 4

Written for

  • WGU
All documents for this subject (6172)

Seller

avatar-seller
dennisgathiru

Reviews received

Content preview

D076 Unit 4
Firm A has an average collection period of 67 days, and the industry norm is 40 days. What can the firm
do in order to be competitive with accounts receivable management in the industry? - ✔✔Tighten the
credit standards for its customers.



MiniCo recently spun off of BigCo. Both companies have the same leverage and asset turnover ratios,
but MiniCo is underperforming on its return on equity to shareholders. If MiniCo would like to improve
its return on equity, which action would help? - ✔✔Reduce costs to improve its overall profitability.



What does a debt ratio of 40% indicate? - ✔✔It indicates that 40% of assets are financed by debt.



What does a net margin of 7% indicate? - ✔✔For every dollar of revenue, 7 cents remain for the equity
holders after all other costs are covered.



What does an average collection period of 70 tell you? - ✔✔On average, a firm takes 70 days to collect
accounts receivable.



What does high inventory turnover relative to the industry and competitors indicate? - ✔✔The firm
does not hold enough inventory and is making its customers wait longer to receive their purchased
goods.



What does inventory turnover assess? - ✔✔The inventory management of a firm



What is operating margin useful for? - ✔✔Comparing the profitability of firms with different capital
structures



What is the difference between return on assets (ROA) and return on equity (ROE)? - ✔✔ROE considers
the capital structure of a company, while ROA does not.

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller dennisgathiru. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $10.79. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

75619 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 14 years now

Start selling
$10.79
  • (0)
  Add to cart