The following information was taken from the 2004 financialstatements of FedExCo

Question

The following information was taken from the 2004 financialstatements of FedExCorporation, a major global transportation/deliverycompany.

(in millions)

Calculate the receivables turnover ratio and the averagecollection period for 2004 for FedEx. (Round to 1decimal place.)
Receivables turnover ratio times
Average collection period days

Is accounts receivable a material component of the company'stotal current assets yes or no? yesno
Calculate what percentage accounts receivable (net) is of currentassets for 2004. (Round to 0 decimalplaces.)
%

Explanation / Answer

1. Receivables Turnover ratio        Net Sales         Av. A/R       24,710                                                 Average A/R = 3,178 + 2,776     2,977                                                                                2         = 8.3 2.Average collection period 365 / receivables turnover = 365     8.3 =43.97 days 3. yes, Accounts receivable is a material component of thecompany's total current assets. 4. Percentage of A/R(net) to tatal current assets          A/R / totalcurrent assets 3,027 4,970 61 %

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