Question

Assume selected financial data for Walmart and Target, two close competitors in the retail industry, are as follows: Ending Accounts Receivable ($ in millions) Walmart Target Net Sales $463,854 79,466 Beginning Accounts Receivable $6,064 6,653 $6,937 6,427 Required: 1-a. Calculate the receivables turnover ratio and average collection period for Walmart and Target. (Enter your answers in millions. Do not round your Intermediate calculations and round your answers to 1 decimal place.) Receivables Turnover Ratio = Receivables Turnover Ratio Walmart Target Oltimes Average Collection Period = Average Collection Period Walmart Target days 1-b. Which company maintains a higher receivables tumover? Walmart Target

Answer 1

Requirement la / / I Walmart Target Numerator Net sales 463854 79466 Accounts Recievable Turn over ratio Denominator = Accounts Recievable Turn over ratio Net Account Recievable = Accounts Recievable Turn over ratio 6501 71.4 times 6540 12.2 times Year / Numerator 365 Average collection period Denominator Recievable turn ove ratio 71.356665 12.150765 Average collection period Average collection period 5.1 days 30.0 days Walmart 365 Target Requirement 1b Walmart