Problem

Computing and Interpreting the Receivables Turnover RatioA recent annual report for FedEx...

Computing and Interpreting the Receivables Turnover Ratio

A recent annual report for FedEx contained the following data:

 

(dollars in thousands)

 

Current Year

Previous Yea r

Accounts receivable

$ 3.587.000

$4,5 17,000

Less: Allowance for doubtful account

196 .000

158,000

Net accounts receivable

$ 3.39 1.000

$4,359,000

Net sales (assume all on credit)

$35.497,000

 

Required:

I. Determine the receivable s turnover ratio and average days sales in receivables for the current year.

2. Explain the meaning of each number

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