Transactions and Financial Statements
The president of Castle Enterprises Ltd., Nicole Castle, is considering the impact that certain transactions have on its receivables turnover and average collection period ratios. Prior to the following transactions, Castle’s receivables turnover was 6 times, and its average collection period was 61 days.
See attached file for the table.
Complete the table, indicating whether each transaction will increase (I), decrease (D), or have no effect (NE) on the ratios.
Nicole was reading through the financial statements for some publicly traded companies and noticed that they had recorded a loss on sale of receivables. She would like you to explain why companies sell their receivables