Question

uppose the amounts presented here are basic financial information (in millions) from the 2020 annual reports of Nike and adidas. Nike adidas Sales revenue $18,954.3 $10,251 Allowance for doubtful accounts, beginning 76.8 116 Allowance for doubtful accounts, ending 107.1 131 Accounts receivable balance (gross), beginning 2,886.9 1,754 Accounts receivable balance (gross), ending 2,955.0 1,553

(a1) Calculate the accounts receivable turnover for both companies. (Round answers to 1 decimal place, e.g. 12.5.) Nike adidas Accounts receivable turnover times times

Answer 1

SOLUTION

	Nike	Adidas
Accounts receivable balance (gross), ending	2,955.0	1,553
Less: Allowance for doubtful accounts, ending	107.1	131
Accounts receivable ending balance (Net) (A)	2,847.9	1,422
Accounts receivable balance (gross), beginning	2,886.9	1,754
Less: Allowance for doubtful accounts, beginning	76.8	116
Accounts receivable beginning balance (Net) (B)	2,810.1	1,638
Average accounts receivable [(A+B)/2]	2,829	1,530

Accounts receivable turnover = Sales / Average accounts receivable

Nike-

Accounts receivable turnover = 18,954.3 / 2,829 = 6.7

Adidas-

Accounts receivable turnover = 10,251 / 1,530 = 6.7