Obtain a copy of the annual report of Avon Products, Inc. for the most recent year....
Obtain a copy of the annual report of Avon Products, Inc. for the most recent year. You can find the annual report at the company's website (www.avon.com (Links to an external site.)) in the investor information section or at the Securities and Exchange Commission's website (www.sec.gov (Links to an external site.)). using EDGAR (Electronic Data Gathering Analysis and Retrieval). Form 10-K, which includes the annual report is required to be filed on EDGAR. Search or scroll within the annual report to find the financial statements.
Required: Answer the following questions related to the company's accounts receivable and bad debts:
- What is the amount of net receivables at the end of the year?
- What is the amount of bad debt expense for the year? (Hint: Check the statement of cash flows)
- Calculate the receivables turnover ratio and average collection period for the most recent year. Round your answer to one decimal place. Assuming the industry averages for the receivables turnover ratio and average collection period at 10.5 times and 34.8 days, respectively, what do you conclude about the receivables of Avon?
Homework Answers
Requirement 1
The balance of net accounts receivable is $751.9 million. By adding back the allowance, total accounts receivable is computed to be $913.3 million.
Requirement 2
Bad debt expense is reported on the statement of cash flows under provisions for doubtful accounts. The amount is $251.1 million.
Requirement 3
|
Receivables turnover ratio |
= |
Net sales |
= |
$10,546.1 |
= |
11.4 |
|
Average accounts receivable |
($913.3 + $936.0) / 2 |
|
Average collection period |
= |
365 |
= |
365 |
= |
32.0 |
|
Receivables turnover ratio |
11.4 |
Avon’s receivables turnover ratio and average collection period are better than the industry average
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Obtain a copy of the annual report of Avon Products,
Inc. for the most recent year....
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A recent annual report for NPS contained the following data:
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$
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Less: Allowance for doubtful accounts
185,000
148,000
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$
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$
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Required:
1. Determine the receivables turnover ratio and
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A recent annual report for NPS contained the following data:
(dollars in thousands)
Current Year
Previous Year
Accounts receivable
$
3,727,000
$
4,527,000
Less: Allowance for doubtful accounts
185,000
148,000
Net accounts receivable
$
3,542,000
$
4,379,000
Net sales (assume all on credit)
$
35,397,000
Required:
1. Determine the receivables turnover ratio and
average days sales in receivables for the current year.
(Use 365 days a year. Do not round intermediate
calculations. Enter your answers in thousands not in
dollars.)...
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of the year. (Round answers to 2 decimal places, e.g.
50.27. Use 365 days for calculation.)
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turnover
times
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Average collection period for
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