Explanation:
The delinquency ratio is usually defined as the total value of severely delinquent receivables (typically over 90 days past due) divided by the total value of all receivables.
First, calculate the total current receivables:
$25,200,000 + $8,250,000 + $2,750,000 + $1,300,000 = $37,500,000.
Next, identify the 90 days past due receivables:
$1,300,000.
Delinquency ratio = $1,300,000 / $37,500,000 = 0.034666... or approximately 3.47%.
Ultimate access to all questions.
Q.12 An ABS based on credit card receivables has the following composition:
| Current receivables | $25,200,000 |
| Receivables over 30 days past due | $8,250,000 |
| Receivables over 60 days past due | $2,750,000 |
| Receivables over 90 days past due | $1,300,000 |
Calculate the delinquency ratio of the ABS.
A
2.93%
B
3.47%
C
5.16%
D
7.33%
No comments yet.