Suppose the 2017 financial statements of 3M Company report net sales of $24.2 bi

Question

Suppose the 2017 financial statements of 3M Company report net sales of $24.2 billion. Accounts receivable (net) are $3.10 billin at the beginning of the year and $3.57 billion at the end of the year. Compute 3M Company's receivable turnover. (Round answer to 1 decimal place, e.g. 12.5.) Accounts receivable turnover ratio times LINK TO TEXT INTERACTIVE TUTORIAL Compute 3M Company's average collection period for accounts receivable in days. (Round answer to 1 decimal place, e.g. 12.5. Use 365 days for calculation.) Average collection period days

Explanation / Answer

Calculation of Recievables turnover: Recievables turnover= Net sales/ Average account recievables Average account recievables=(3.10+3.57)/2=3.335 billion Recievables turnover= 24.2/3.335= 7.26 Therefore receivable tunover is 7.3 times Calculation of collection period: Collection period= 365/recievables turnover Collection period=365/7.3=50 days

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