Why Choose Us?
0% AI Guarantee
Human-written only.
24/7 Support
Anytime, anywhere.
Plagiarism Free
100% Original.
Expert Tutors
Masters & PhDs.
100% Confidential
Your privacy matters.
On-Time Delivery
Never miss a deadline.
Mattel, Inc
Mattel, Inc., and Hasbro are two of the largest and most successful toymakers in the world, in terms of the products they sell and their receivables management practices. To evaluate their ability to collect on credit sales, consider the following information reported in their annual reports (amounts in millions) Fiscal Year Ended: Net Sales Accounts Receivable Allowance for Doubtful Accounts Accounts Receivable, Net of Allowance Mattel 2015 2014 2013 55,700 $6,000 $6,488 1,170 1,130 1,280 25 30 20 1,145 1,100 1.260 Hasbro 2015 2014 2013 54,450 $4,280 $4,888 1,235 1,116 1,115 15 16 1,220 1,100 1,095 Required: 1. Calculate the receivables turnover ratios and days to collect for Mattel and Hasbro for 2015 and 2014. TIP In your calculations, use average Accounts Receivable Net of Allowance (Use 365 days in a year. Do not round intermediate calculations on Accounts Receivable Turnover Ratio. Round your final answers to 1 decimal place. Use final rounded answers from Accounts Receivable Turnover Ratio for Days to Collect ratio calculation.)
2015 2014 Mattel Hasbro Mattel Hasbro Reables Turnover Ratio Days to Collect 2-a. Which of the companies was quicker to convert its receivables into cash in 2015? Mattel O Hasbro 2-b. Which of the companies was quicker to convert its receivables into cash in 2014?
Coca-Cola and PepsiCo are two of the largest and most successful beverage companies in the world in terms of the products that they sell and their receivables management practices. To evaluate their ability to collect on credit sales, consider the following rounded amounts reported in their annual reports (amounts in millions) Coca-Cola Pepsico Fiscal Year Ended: 2015 2013 2015 2014 2013 Net Sales $44,300 $46,000 $46,800 $63,100 $66,762 566,400 Accounts Receivable 4,290 7,150 Allowance for Doubtful Accounts 350 60 150 Accounts Receivable, Net of Allowance 3,940 4,470 4,870 6,440 6,700 7.000 2014 480e 4,93e 33e 6,570 130 6,840 140 Required: 1. Calculate the receivables turnover ratios and days to collect for Coca-Cola and PepsiCo for 2015 and 2014. (Use 365 days in a year. Do not round intermediate calculations on Accounts Receivable Turnover Ratio, Round your final answers to 1 decimal place. Use final rounded answers from Accounts Receivable Turnover Ratio for Days to Collect ratio corpulation.)
Nemy Do not round intermediate calculations on Accounts Receivable Turnover Ratio. Round your final answers to 1 decimal place Use final rounded answers from Accounts Receivable Turnover Ratio for Days to Collect ratio calculation) 2014 2015 Coca-Cola PepsiCo Coca-Cola Pepsico Receivables Turnover Ratio Days to collect 2. Which of the companies is quicker to convert its receivables into cash? OPepsiCo Coca-Cola
Expert Solution
1.Receivable Turnover Ratios for Mattel INC. AND Hasbro = CREDIT SALES/AVERAGE ACCOUNTS RECEIVABLE
Average Accounts Receivable= (Opening accounts receivable + Closing accounts receivale) / 2
For year 2014,
Mattel INC.,
Credit Sales = $6,000 Average Accounts Receivable= ($1,260+$1,100) / 2 = $1,180
Receivable Turnover Ratio = $6,000 / $1,180
= 5.084745 Times
Days to collecting Ratio =365 / Receivable turnover ratio
=365 / 5.084745
=71.78 days
=72 days (rounded off)
Hasbro.,
Credit Sales = $ Average Accounts Receivable= ($1,095+$1,100) / 2 = $1,097.5
Receivable Turnover Ratio = $4,280 / $1,097.5
=3.899772 Times
Days to collecting Ratio =365 / Receivable turnover ratio
=365 / 3.899772
=93.59 days
=94 days (rounded off)
For year 2015,
Mattel INC.,
Credit Sales = $5,700 Average Accounts Receivable= ($1,100+$1,145) / 2 = $1,122.5
Receivable Turnover Ratio = $5,700 / $1,122.5
= 5.07795 Times
Days to collecting Ratio =365 / Receivable turnover ratio
=365 / 5.07795
=71.87 days
=72 days (rounded off)
Hasbro.,
Credit Sales = $ 4,450 Average Accounts Receivable= ($1,100+$1,220) / 2 = $1,160
Receivable Turnover Ratio = $4,450 / $1,160
=3.836206 Times
Days to collecting Ratio =365 / Receivable turnover ratio
=365 / 3.836206
=95.146067 days
=95 days (rounded off)
2.(a) In the year 2015 Mattel Inc., has a quicker coversion ratio of recievables into cash which is 72 days as compared to 95 days of Hasbro.
2.(b) In the year 2014 Mattel Inc., has a quicker coversion ratio of recievables into cash which is 72 days as compared to 94 days of Hasbro
Coca-cola & Pepsi Co.
1.Receivable Turnover Ratios for Coca-cola & Pepsi Co. = CREDIT SALES/AVERAGE ACCOUNTS RECEIVABLE
Average Accounts Receivable= (Opening accounts receivable + Closing accounts receivale) / 2
For year 2014,
Coca-cola
Credit Sales = $46,000 Average Accounts Receivable= ($4,870+$4,470) / 2 = $4,670
Receivable Turnover Ratio = $46,000 / $4,670
= 9.850107 Times
Days to collecting Ratio =365 / Receivable turnover ratio
=365 / 9.850107
=37.05543 days
=37 days (rounded off)
Pepsi Co.
Credit Sales = $66,700 Average Accounts Receivable= ($7,000+$6,700) / 2 = $ 6,850
Receivable Turnover Ratio = $66700 / $6,850
=9.737226 Times
Days to collecting Ratio =365 / Receivable turnover ratio
=365 / 9.737226
=37.485007 days
=38 days (rounded off)
For year 2015,
Coca-cola
Credit Sales = $44,300 Average Accounts Receivable= ($4,470+$3,940) / 2 = $4,205
Receivable Turnover Ratio = $44,300 / $4,205
= 10.535077 Times
Days to collecting Ratio =365 / Receivable turnover ratio
=365 / 10.535077
=34.646162 days
=35 days (rounded off)
Pepsi Co.,
Credit Sales = $63,100 Average Accounts Receivable= ($6,700 + $6,440) / 2 = $6,570
Receivable Turnover Ratio = $63,100 / $6,570
=9.604261 Times
Days to collecting Ratio =365 / Receivable turnover ratio
=365 / 9.604261
=38.00396 days
=38 days (rounded off)
2.In the year 2014 Coca-cola has a quicker coversion ratio of recievables into cash which is 37 days as compared to 38 days of Pepsi Co.
In the year 2015 Coca-cola has a quicker coversion ratio of recievables into cash which is 35 days as compared to 38 days of Pepsi Co.
Feedback would be appreciated
Note : Positive feedback would be appreciated. If you still have any doubt or query feel free to comment down in comment section.
. I will try to resolve it.
Archived Solution
You have full access to this solution. To save a copy with all formatting and attachments, use the button below.
For ready-to-submit work, please order a fresh solution below.
