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Unformatted text preview: remained outstanding. Similarly, 70 percent of March's sales were still outstanding, so March's contribution to receivables was 0.7($300) = $210. The focal point of the uncollected balances schedule is column 4, the receivables-to-sales ratio. When we compare March and June, we see no difference, which is what we should see, given that there has been no change in the payment pattern. Thus, the uncollected balances schedule gives a true picture of customers' payment patterns, even when sales fluctuate. Note also (1) that any increase in column 4 from a month in one quarter to the corresponding month in the next quarter is "bad" in the sense that it indicates a slowdown in payments, and (2) that the bottom line gives a summary of the changes in payment patterns....
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This note was uploaded on 07/13/2011 for the course FIN 4414 taught by Professor Staff during the Spring '08 term at University of Florida.
- Spring '08