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13 December, 18:15

Globo-Chem Co. reported net sales of $600 million last year and generated a net income of $132.00 million. Last year’s accounts receivable increased by $17 million. What is the maximum amount of cash that Globo-Chem Co. received from sales last year?

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  1. 13 December, 18:19
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    The answer is $583 million.

    Explanation:

    The two variables that is of interest to us in this question are net sales which is the same thing as net revenue and increase in receivables. These two are need to calculate the cash Globo-Chem Co. collected last year from her customers.

    Cash collected from customers = net sales (revenue) minus increase in accounts receivable.

    Net sales (revenue) = $600 million

    Increase in revenue = $17 million

    Therefore, cash collected from customers is $600 million - $17 million

    =$583,000
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