Selzer Inc. sells all its merchandise on credit. It has a profit margin of 4 percent, days sales outstanding equal to 60 days, receivables of $150,000, total assets of $3 million, and a debt ratio of 0.64, What is the firm's return on equity (ROE)? Assume a 365-day year.

Selzer Inc. sells all its merchandise on credit. It has a profit margin of 4 percent, days sales outstanding equal to 60 days, receivables of $150,000, total assets of $3 million, and a debt ratio of 0.64, What is the firm's return on equity (ROE)? Assume a 365-day year.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 8PA: The following select financial statement information from Candid Photography. Compute the accounts...

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Concept explainers

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.

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Selzer Inc. sells all its merchandise on credit. It has a profit margin of 4 percent, days sales outstanding
equal to 60 days, receivables of $150,000, total assets of $3 million, and a debt ratio of 0.64. What is the
firm's return on equity (ROE)? Assume a 365-day year.
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