Problem

The following information was taken from recent annual reports of Goodyear Tire&Rubber...

The following information was taken from recent annual reports of Goodyear Tire&Rubber and PPL Corp.,a public utility:

 

Goodyear

PPL

Net sales

$21.0 billion

$ 12.2 billion

Average accounts receivable

2.7 billion

824 million

a. Compute for each company the accounts receivable turnover rate for the year.


b. Compute for each company the average number of days required to collect outstanding receivables (round answers to nearest whole day).


c. Explain why the figures computed for Goodyear in parts a and b are so different from those computed for PPL.

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