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    Donita
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    This document contains 4 accounting problems: 1) Calculating days sales outstanding of 40 days given annual sales of $7.3M, determining accounts receivable is $800,000 2) Calculating an equity multiplier of 2.4 given total assets, determining the debt ratio is 58.33% 3) Calculating a market-to-book ratio of 4.27 given book value of $7.5M and market value of $32M 4) Mentioning a price earnings ratio problem.

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    Chapter 6 solutions

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    chapter 6 problem

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    This document contains 4 accounting problems: 1) Calculating days sales outstanding of 40 days given annual sales of $7.3M, determining accounts receivable is $800,000 2) Calculating an equity multiplier of 2.4 given total assets, determining the debt ratio is 58.33% 3) Calculating a market-to-book ratio of 4.27 given book value of $7.5M and market value of $32M 4) Mentioning a price earnings ratio problem.

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    17 views1 page

    Chapter 6 Problem

    Uploaded by

    Donita
    This document contains 4 accounting problems: 1) Calculating days sales outstanding of 40 days given annual sales of $7.3M, determining accounts receivable is $800,000 2) Calculating an equity multiplier of 2.4 given total assets, determining the debt ratio is 58.33% 3) Calculating a market-to-book ratio of 4.27 given book value of $7.5M and market value of $32M 4) Mentioning a price earnings ratio problem.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    of 1

    Problem 1 (Day Sales Outstanding)

    DSO= Accounts Receivable


    Sales/365
    40 days= Accounts Receivable
    P 7,300,000./365 days
    40 days= Accounts Receivable
    P 20,000./days
    Accounts Receivable= P 800,000.

    Problem 2 (Debt Ratio)


    Equity Multiplier= Asset/Equity
    Asset
    2.4= Equity

    Debt/Ratio= 1−1/(𝐴/𝐸)

    1−1/2.4
    Debt/Ratio=

    Debt/Ratio= 0.5833
    Debt/Ratio= 58.33%

    Problem 3 (Market/Book Ratio)


    Book Value= ₱6,000,000.00
    ₱800,000.00
    Book Value= ₱7.50

    Market/Book= ₱32.00
    ₱7.50
    Market/Book= 4.26666666666667

    Problem 4 (Price Earnings Ratio)

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