Question

Suppose the amounts presented here are basic financial information (in millions) from the 2022 annual reports...

Suppose the amounts presented here are basic financial information (in millions) from the 2022 annual reports of Nike and Adidas.

Nike

Adidas

Sales revenue

 $18,572.4 $10,817.4

Allowance for doubtful accounts, beginning

 75.0 125.0

Allowance for doubtful accounts, ending

 111.0 128.0

Accounts receivable balance (gross), beginning

 2,843.0 1,866.0

Accounts receivable balance (gross), ending

 2,971.0 1,665.0

(a1)

Correct answer iconYour answer is correct.

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

Nike

Adidas

Accounts receivable turnover

 enter the accounts receivable turnover in times rounded to 1 decimal place times enter the accounts receivable turnover in times rounded to 1 decimal place times

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(a2)

Calculate the average collection period for both companies. (Round answers to 1 decimal place, e.g. 12.5. Use 365 days for calculation.)

Nike

Adidas

Average collection period

 enter the average collection period in days rounded to 1 decimal place days enter the average collection period in days rounded to 1 decimal place days
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Answer #1

(a1)

Correct answer iconYour answer is correct.

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

Nike

Adidas

Accounts receivable turnover

 18572.40/2814 = 6.6 times 10817.40/1639 = 6.6 times

(a2)

Calculate the average collection period for both companies. (Round answers to 1 decimal place, e.g. 12.5. Use 365 days for calculation.)

Nike

Adidas

Average collection period

 365/6.6 = 55.3 days 55.3 days
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