Cost of money is affected by factors which includes______________?

A. 5 days
B. 36 days
C. 48 days
D. 73 days
The average collection period is calculated by dividing the average balance of accounts receivable by total net credit sales for the period and multiplying the quotient by the number of days in the period.
use the following formula:
(Average Receivables/Net Sales)*365
150,000/750,000*365 = 73 days
_________________________________________________
Net sales=750,000
A/C receivables= 150,000
days in a year =365
Collection period= (A/C Receivables/ net sales)*days in a year
= (150,000/750,000)*365= 73 days

Which of the following ratios are intended to address the firm’s financial leverage?

A. Liquidity Ratios
B. Long-term Solvency Ratios
C. Asset Management Ratios
D. Profitability Ratios

These ratios are intended to address the firm’s long-run ability to meet its obligations, or its financial leverage

Which of the following ratios is NOT from the set of Asset Management Ratios?

A. Inventory Turnover Ratio
B. Receivable Turnover
C. Capital Intensity Ratio
D. Return on Assets

The capital intensity ratio is a financial calculation measuring how much a company is invested in total assets compared to how much it is earning in revenue. Where as Asset turn over ratio determines how efficiently or effectively an organization is using its assets.