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April 16, 2014

Homework Help: Healthcare finance

Posted by hunter007 on Wednesday, December 7, 2011 at 4:05pm.

Milwaukee Surgical Supplies, Inc., sells on terms of 3/10, net 30. Grosee sales for the year are $1,2000,000 and the collections department estimates that 30% of the customers pay on the tenth day and take discounts, 40% pay on the thirtieth days, and remaining 30% pay, on average, 40 days after the purchase. (Assume 360 days/year)

1. Calculate the firm's average collection period.

2.Calculate the firm's current receivables balance.

3.Calcutate the firm's new receivables balance if Milwaukee Surgical toughened up on its collection policy, with the result that all non-discount customers paid on the 30th day.

4. Assuming the cost to the firm to carry receivables is 8% per annum, calculate the annual saving resulting from the toughened credit policy. (Assume the entire amount of receivable had to be financed.)

5. What is the primary difference between financial statement analysis and operating indicator analysis and why are both types useful to health services managers?

6. Describe the mechanics of the market multiple approach to business valuation.

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