Question

Suppose the following information was taken from the 2022 financial statements of FedEx Corporation, a major global transportation/delivery company (in millions) 2022 2021 Accounts receivable (gross) $3.587 $4,517 3,391 4.359 Accounts receivable (net) Allowance for doubtful accounts Sales revenue Total current assets 196 35,497 7.116 158 37,953 7,244 Answer each of the following questions, Calculate the accounts receivable turnover and the average collection period for 2022 for FedEx. (Round answers to 1 decimal plac, calculation) 12.5. Use 365 days for Accounts receivable turnover times The average collection period for 2022 days

Answer 1

Account receivable turnover = Net Credit sales / Average net account receivable

Sales revenue = $35,497

Av. Net Account receivable = ( $ 4,359 + $3,391 ) / 2 = $ 3875

Account receivable turnover = $35,497 / $ 3,875 = 9.1605 or         9.2

Average collection period for 2022 = 365 Days / Account receivable turnover

= 365 days / 9.2 times = 39.7 days or 38 days