SKI Equipment Company Finance & Accounting Assignment
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The company can get $3,030,303 (3,000,000/.99) of free trade credit. Based on the total assets turnover of 2.08 and the debt/assets ratio and the budgeted turnover of not more than $661,102, SKI could get approximately $130,000 in costly credit in order to remain within a Debt/asset ratio of 100%. The percentage cost of the costly credit would be somewhere between 15 and 21%.