Computing Quality of Sales Ratios
Consider the following information for two hi tech companies:
|
Oxford, LTD |
Kendall, LTD |
|
|
(Dollars in thousands) |
||
|
Accounts receivable |
||
|
Beginning of year |
$ 9,915 |
$ 408 |
|
End of year |
11,250 |
7,258 |
|
Sales for year |
21,891 |
11,606 |
Required
a. Calculate the cash collected from customers for each firm.
b. Compute the quality of sales ratio for each firm.
c. What do these ratios indicate?