Question

In: Accounting

Suppose the amounts presented here are basic financial information (in millions) from the 2017 annual reports...

Suppose the amounts presented here are basic financial information (in millions) from the 2017 annual reports of Nike and adidas.

Nike

adidas

Sales revenue

 $ 20,161 $ 9,941

Allowance for doubtful accounts, beginning

 84.6 108

Allowance for doubtful accounts, ending

 120 133

Accounts receivable balance (gross), beginning

 3,128 1,797

Accounts receivable balance (gross), ending

 3,243.0 1,611

(a)

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

Solutions

Expert Solution

Ans.    Accounts receivables turnover     =   Sales / Average accounts receivables    
Nike 20161 / 3083.2 6.5 times
Adidas 9941 / 1583.5 6.3 times
Average accounts receivables = (Net Beginning accounts receivables + Net Ending accounts receivables) / 2
Nike (3043.4 + 3123) / 2 3083.2
Adidas (1689 + 1478) / 2 1583.5
*Calculations for Nike:
Net beginning accounts receivables = Beginning accounts receivables - Beginning allowance for doubtful accounts
3128 - 84.6
3043.4
Net ending accounts receivables = Ending accounts receivables - Ending allowance for doubtful accounts
3243 - 120
3123
*Calculations for Adidas:
Net beginning accounts receivables = Beginning accounts receivables - Beginning allowance for doubtful accounts
1797 - 108
1689
Net ending accounts receivables = Ending accounts receivables - Ending allowance for doubtful accounts
1611 - 133
1478

ekkarill92 answered 3 years ago
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