How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask getsetgo Your Own Question
getsetgo
getsetgo, Master's Degree
Category: Business and Finance Homework
Satisfied Customers: 3487
Experience:  MBA from premium institute. 9+ years experience at executive level in Fortune-200 company.
15962517
Type Your Business and Finance Homework Question Here...
getsetgo is online now
A new question is answered every 9 seconds

24. Movin Meals operates several specialty vans that provide

This answer was rated:

24. Movin Meals operates several specialty vans that provide hot food and beverages to workers at various construction sites. The company has annual sales of $81,600. Cost of goods sold average 63 percent of sales and the profit margin is 4.8 percent. The average accounts receivable balance is $6,200. Calculate the Movin Meals’ average collection period. (Please calculate the arithmetic solution and show your work)

Given:

Annual Sales = $81,600

COGS = 63% of sales = $81,600*63% = $51,408

Profit margin = 4.8%

Average account receivable balance = $6,200

Average Collection Period = (Average Account receivable balance * 365)/Credit sales

Assuming all sales are credit sales, we have:

Average Collection Period= ($6,200*365)/ $81,600 = 27.73 days

getsetgo and other Business and Finance Homework Specialists are ready to help you