Question

Suppose the 2022 financial statements of 3M Company report net sales of $22.0 billion. Accounts receivable (net) are $2.7 billion at the beginning of the year and $2.80 billion at the end of the year.

Compute 3M’s accounts receivable turnover. (Round answer to 1 decimal place, e.g. 12.5.)

Accounts receivable turnover ratio

enter the accounts receivable turnover ratio in times rounded to 1 decimal place

times

eTextbook and Media

List of Accounts

  

  

Compute 3M’s average collection period for accounts receivable in days. (Round answer to 1 decimal place, e.g. 12.5. Use 365 days for calculation.)

Average collection period

enter the average collection period in days rounded to 1 decimal place

days

Answer 1

Accounts Receivable Turnover

= Sales/Average accounts receivables

= 22 / [(2.7+2.8)/2]

= 8 times

​​​​​​Average collection period = 365/Accounts Receivable Turnover

= 365/8

= 45.6 days