Question

Below are amounts (in millions) from three companies' annual reports Beginning Accounts ing Accounts Net Sales $315,427 6,34460,878 61,963 iva $2,692 va WalCo TarMart CostGet $1,745 5,816 559 595 Required: 1. Calculate the receivables turnover ratio and the average collection period for WalCo, TarMart and CostGet. (Do not round intern und your "Average accounts recelvable" and "Recelvables turnover ratio" answers to one decimal place.) Receivables Turnover Ratio Net sales Average accounts receivableReceivables turnover ratio WalCo$ TarMart $ CostGet 315,427 60,878 $ 61,963 2,218.5 6,080.0 577.0 142.2 times 10.0 times 107.4 times Average Collection Period 365 Receivables turnover ratio Average collection period WalCo TarMart CostGet 365 365 365 140.2 8.0 105.4 2.6 days 45.6 days 3.5 days

Answer 1

			Walco	Tarmart	Costget
Beginning Accounts recievable			1745	5816	559
Ending Accounts r3ceivable			2692	6344	595
Total of 2yr balance			4437	12160	1154
Average Accounts reicevable			2218.5	6080	577
Recievable Turnover ratio:
Company	Net Sales     /		Average Accounts receivable =			Receivable Turnover ratio
Walco	315427   /		2218.5    =			142.18	times
Tarmart	60878 /		6080       =			10.01	times
Costget	61963    /		577       =			107.39	times
Average collection period:
Company	365 /		Receivable Turnover    =			Average collection period
Walco	365   /		142.18      =			2.57	days
Talmart	365   /		10.01    =			36.46	Days
Costget	365   /		107.39    =			3.4	Days