Question

Mathis and Hashey are two of the largest and most successful toymakers in the world, in terms of the products they sell and their receivables management practices. To evaluate their ability to collect on credit sales, consider the following information reported in their annual reports (amounts in millions). Mathis Hashey Fiscal Year Ended: 2015 2014 2013 2015 2014 2013 Net Sales $3,956 $3,331 $4,118 1,078 $2,102 $2,168 $2,222 Accounts Receivable 684 810 902 982 554 Allowance for Doubtful Accounts Accounts Receivable, Net of Allowance 13 16 17 22 24 23 1,065 668 793 880 958 531 Required: 1. Calculate the receivables turnover ratios and days to collect for Mathis and Hashey for 2015 and 2014. TIP: In your calculations, use average Accounts Receivable, Net of Allowance. (Use 365 days in a year. Do not round intermediate calculations on Accounts Receivable Turnover Ratio. Round your final answers to 1 decimal place. Use final rounded answers from Accounts Receivable Turnover Ratio for Days to Collect ratio calculation.) es 2014 2015 Hashey Hashey Mathis Mathis Receivables Tunover Ratio Days to Collect ceivables into cash in 2015? 2-a. Which of the companies was quicker to convert its i O Mathis Hashey

Answer 1

	Mathis		Hashey
	2015	2014	2015	2014
Average account receivables, net of allowance [ ( beginning + ending ) / 2 ]	866.50 [ (668+1065)/2 ]	730.50 [ (793+668)/2 ]	919.00 [ (958+880)/2 ]	744.50 [ (531+958)/2 ]

Required 1 :
	2015		2014
	Mathis	Hashey	Mathis	Hashey
Receivables turnover ratio ( Net sales / Average accounts receivable, net of allowance )	4.6 [ 3956/866.50 ]	2.3 [ 2102/919.00 ]	4.6 [ 3331/730.50 ]	2.9 [ 2168/744.50 ]
Days to collect ( Days in a year / Receivables turnover ratio )	79.3 [ 365/4.6 ]	158.7 [ 365/2.3 ]	79.3 [ 365/4.6 ]	125.9 [ 365*2.9 ]

Required 2-a :

Which of the companies was quicker to convert its receivables into cash in 2015?

Answer : Mathis

Required 2-b :

Which of the companies was quicker to convert its receivables into cash in 2015?

Answer : Mathis