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?