Assume selected financial data for Walmart and Target, two close competitors in

Question

Assume selected financial data for Walmart and Target, two close competitors in the retail industry, are as follows: Beginning Ending Accounts Accounts Net ($ in millions) Sales Receivable Receivable Walmart Target $ 461,854 78,366 $ 5,964 6,837 6,603 6,377 Required 1-a. Calculate the recelvables turnover ratio and average collection period for Walmart and Target. (Enter your answers in millions. Do not round your intermediate calculations and round your answers to 1 decimal place.) Receivables Turnover Ratio Receivables Turnover Ratio Walmart times Target times Average Collection Period Average Collection Period Walmart days days Target 1-b. Which company maintains a higher receivables turnover? Walmart Target 016 00 CS-45186

Explanation / Answer

1-a. Receivables Turnover Ratio

Average Collection Period

1-b. Walmart

Net sales / Average accounts receivable = Receivables Turnover Ratio Walmart $461,854 / $6,400.5 = 72.2 times Target $78,366 / $6,490 = 12.1 times

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