Question

Based on the information below and answer this question. What trends do you notice among related industries? Does anything surprise you?

Company	Accounts Receivable/Assets
3M Co	7.65
Apple Inc	20.65
Boeing Co	9.46
Caterpillar Inc	11.3
Chevron	17.6
Cisco	23.54
Coca-Cola	23.5
Disney	10.56
Home Depot	21.94
IBM	4
Intel	23
Johnson & Johnson	11.9
McDonald's	18.9
Merck	13.14
Microsoft	11.54
Nike	6.45
Pfizer	20.61
Procter & Gamble	27.38
United Technologies	7.77
United Health	8.13
Verizon	12.3
Walmart	35.24

Answer 1

An acceptable performance indicator would be to have no more than 15 to 20 percent total accounts receivable in the greater than 90 days category. Yet, the MGMA reports that better performing practises show much lower percentages, typically in the range of 5 percent to 8 percent, depending on the speciality.

On a company's balnce sheet, the accounts rececivable line represents money it is owed by its customers for goods or services rendered..Ideally when a company has high levels of receivables , it signifies that it will be flush with cash at a defined date in the future.

A high receivables turnover ratio can indicate that a company's collection accounts receivable is efficient and that the company has a high proportion of quality customers that pay their debts quickly.

The software companies like Apple Inc, Intel, Cisco etc shows a moderate rate of accounts receivable which is equal to or more than 20.

The health related companies like United health, Co, etc shows a good account rececivable

A high turnover shows in food related and beauty products co like walmart,Procter & Gramble etc