Check my work n reported the following Information In lts financial statements f

Question

Check my work n reported the following Information In lts financial statements for three successve quarters ($ Microsoft In millions): 10 points 12/31/2815 9/38/2815 6/38/2815 (01) $14,57 $11,444$17,988 $23,796 $28,379 $22,188 (02) (04) Balance sheets: Accounts receivable, net Income statements Sales revenue Required: Compute the recelvables turnover ratlo and the average collection perlod for Q1 and Q2 Assume that each quarter consists of 91 days. (Enter your answers in millions. Round average accounts recelvable answers to 1 decimal place and "Turnover ratio" answers to 3 decimal places.) Hint - Receivables Turnover Ratio Choose NumeratorChoose Denominator: t sales Average accounts receivable (netReceivables turnover ratio O times 0 times 01 20,379 02 period Average collection period -Average collection period l Choose 91 days Recaivables turnover ratio 0 days 0 days 21 02

Explanation / Answer

Receivables Turnover ratio Net Sales / Average accounts receivable (net) = Receivables turnover ratio Q1 $20,379 / ($11,444 + $17,908) / 2 = $14,676.0 = 1.389 times Q2 $23,796 / ($14,507 + $11,444) / 2 = $12975.5 = 1.834 times Average collection period 91 days / Receivables turnover ratio = Average collection period Q1 91 / 1.389 = 65.51 days Q2 91 / 1.834 = 49.62 days

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