?(Efficiency analysis)
The Brenmar Sales Company had a gross profit margin? (gross profitsdivided by ÷?sales) of 35 percent and sales of $9.2 million last year. 80 percent of the? firm's sales are on? credit, and the remainder are cash sales. ?Brenmar's current assets equal $1.4 ?million, its current liabilities equal $ 302 comma $302,600?, and it has $ 109 comma $109,100 in cash plus marketable securities.
a. If? Brenmar's accounts receivable equal $ 562 comma $562,500?, what is its average collection? period?
b. If Brenmar reduces its average collection period to 15 ?days, what will be its new level of accounts? receivable?
c. ?Brenmar's inventory turnover ratio is 8.5 times. What is the level of? Brenmar's inventories?