Analyzing Accounts Receivable
Following are the average accounts receivable and net sales reported recently by two large beverage companies (dollar amounts are stated in millions):
| Average Accounts Receivable | Net Sales |
Molson Coors Brewing Co. | $517 | $ 5,170 |
Anheuser-Busch InBev | 2,606 | 39,046 |
a. Compute the accounts receivable turnover rate for each company (round your results to one decimal place).
b. Compute the average number of days that it takes for each company to collect its accounts receivable (round your results to the nearest whole day).
c. Based upon your computations in a and b, which company’s accounts receivable appear to be most liquid? Defend your answer.
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