Suppose the amounts presented here are basic financial information (in millions) from the 2020 annual reports of Nike

Question

Suppose the amounts presented here are basic financial information (in millions) from the 2020 annual reports of Nike and adidas. Nike adidas Sales revenue $20,622.5 $11,242 Allowance for doubtful accounts, beginning 79.1 112 Allowance for doubtful accounts, ending 109.2 136 Accounts receivable balance (gross), beginning 2,886.6 1,760 Accounts receivable balance (gross), ending 2,951.7 1,568 Calculate the accounts receivable turnover for both companies. (Round answers to 1 decimal place, e.g. 12.5.) Nike adidas Accounts receivable turnover times times 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 days day

Help In Homework · Accepted Answer

Average account receivable for Nike = (2886.6-79.1)+(2951.7-109.2)/2 = 2825 Average account receivable for Adidas = (1760-112)+(1568-136)/2 = 1540 Receivable turnover for Nike = 20622.5/2825 = 7.3 Times Receivable turnover for Adidas = 11242/1540 = 7.3Times Average collection period = 365/Receivable turnover Nike Adidas Average collection period 365/7.3 = 50 Days 365/7.3 = 50 Days

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Suppose the amounts presented here are basic financial information (in millions) from the 2020 annual reports of Nike and adidas

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Archived Solution

	Nike	Adidas
Average collection period	365/7.3 = 50 Days	365/7.3 = 50 Days