Davidson's department - Davidsons cash flow analysis...

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Davidson’s cash flow analysis
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Davidson’s cash flow analysis
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Current $750,000 86% pa id 645,000 14% become 1M o ld b ill 105,000 o ld b ill $400,000 Rem ian 1M 400,000 22% o portion id 88,000 78% 2M o b ill 312,000 o ill $200,000 54% o id 108,000 16% rem o b ill 32,000 12% bad deb t 24,000 later rema in o b ill 344,000 Bad Deb t Bad t Inc A fter pa id , 2M in 55,040 41,280 later Bad t o b ill 367,040 A in 58,726 44,045 3,686 3M t o b ill 370,726 A in 59,316 44,487 590 4M t o b ill 371,316 A in 59,411 44,558 94 5M t o b ill 371,411 A in 59,426 44,569 15 6M t Cash Analysis
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Transition Matrix Representation 1 0 0 0 0.12 0.18 0.16 0.54 0 0.46 0.32 0.22 0 0 0.14 0.86 P 1 1 P 2 2 B B T =
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Transition Matrix Representation 0.12 0.18 0.16 0.54 0 0.46 0.32 0.22 1 0 0 0 0 0.14 0 0.86 P B B P 1 1 2 2 I = I dentity matrix 0 = Matrix of zeros R = Transition probabilities of the debt’s absorbed to next period Q = Non-absorbing states We have divided the transition matrix into four parts T = I 0 R Q =
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Risk M anagement ( debt collection agency) The fee could range from 10% to 50% (though more typically the fee is 
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This note was uploaded on 03/27/2011 for the course ACCT 101 taught by Professor Kwun during the Spring '11 term at Western Kentucky University.

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Davidson's department - Davidsons cash flow analysis...

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