Question

The following information (in $ millions) was taken from recent annual reports of Kellogg Company and General Mills, Inc. Sales revenue Average accounts receivable balance Kellogg General Mills $13,525 $17,630 $1,310 $1,435 Calculate each company's accounts receivable turnover. (Round answers to 1 decimal place, e.g. 50.1.) Accounts receivable turnover Kellogg times General Mills times LINK TO TEXT LINK TO VIDEO Calculate each company's average collection period. (Round answers to 1 decimal places, e.g. 50.1. Use 365 days for calculation.) Average collection period Kellogg days General Mills days Click if you would like to Show Work for this question: Open Show Work

Answer 1

1. Accounts Receivable Turnover = Sales turnover / Accounts receivables

a) Accounts Receivable Turnover (Kellogg)

= $13525 / $1310

= 10.3 Times

b) Accounts Receivable Turnover (General Mills)

= $117630 / $1435

= 12.3 Times

.

2. Average Collection period = Accounts Receivable/ sales turnover x 365

a) Average Collection period (Kellogg)

= $ 1310/$13525 x 365

= 35.4 Days

b) Average Collection period (General Mills)

= $1435/$17630 x 365

= 29.7 Days