Heap Corporation Industry

Terms
2/10, net/30 2/10, net/60
Credit granted as percent of applicants by credit class
A 100% 100%
B 100% 100%
C 25% 70%
D 11% 40%
E 2% 20%
F 0% 5%
Average collection 30 days 60 days

Revenue 80 100 1.25

Credit sales 72 92
Cash sales 8 8
Costs and other 70 85.3
manuf variable 50 62.5
manuf fixed 7.4 7.4
Administrative e 3 3
Selling variable 8 10
Bad debt provisi 1.6 2.4
Net income befor 10 14.7
Federal income t 5 7.34999999999999
Net income 5 7.3

Materials and
10
supplies
Labour 40
Fixed overhead 7.4
Total 57.4

receivables
collection period= --------------------------- * 360
credit sales

receivables
30 = --------------------------- * 360
72

receivables 6.000 mln USD

net profit(loss) 5
 ROA = --------------------------- ----- 0.125
total assets 40

80 100
Asset turnover --------------------------- 2 -------------- 1.818072
40 55.003

Net profit (loss) 7.3

Profit Margin --------------------------- --------------------------- 7.35%
Total sales 100

initial toal assets 40

increase of inv 5.67
increase of receiv 9.333
"new" total assets 55.003

"old receivables" 6.000

"new receivables" 15.3333333333333

"new receivables"
60 `= ------------------------ * 360
92

receivables
collection period = ------------------------------* 360
credit sales

receivables
credit sales = ------------------------------* 360
collection period

collection period
receivables = ---------------------------------
360 * credit sales
 Terms of
1000 970
`3/20 net/40
if collectoin is received in 14 days
the amount received is?

100
3
97 USD

20 0.030928
365 ?

annual 0.564433

1 1.030928 ^ 18.25 = 1 1+ annual rate

annual rate 1.743476 -1 0.743476