Question

Suppose the amounts presented here are basic financial information (in millions) from the 2022 annual reports of Nike and Adidas. Nike Adidas Sales revenue $18,891.7 $9,491.6 Allowance for doubtful accounts, beginning 82.0 121.0 Allowance for doubtful accounts, ending 100.0 123.0 Accounts receivable balance (gross), beginning 3,127.0 1,778.0 Accounts receivable balance (gross), ending 3,249.0 1,578.0

Calculate the accounts receivable turnover for both companies. (Round answers to 1 decimal place, e.g. 12.5.) Nike Adidas Accounts receivable turnover enter the accounts receivable turnover in times rounded to 1 decimal place times enter the accounts receivable turnover in times rounded to 1 decimal place 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 enter the average collection period in days rounded to 1 decimal place days enter the average collection period in days rounded to 1 decimal place days

Answer 1

Solution

	Nike	Adidas
Accounts receivable turnover	6.1	6.1

.

	Nike	Adidas
Average Collection period	59.8	59.8

Working

	Nike	Adidas
Opening balance gross	$          3,127.00	$    1,778.00
Opening balance of Doubtful debts	$                82.00	$        121.00
Net Opening Balance	$          3,045.00	$    1,657.00
Closing balance gross	$          3,249.00	$    1,578.00
Closing balance of Doubtful debts	$              100.00	$        123.00
Net Closing Balance	$          3,149.00	$    1,455.00
Accounts receivable turnover
Average Receivables	$          3,097.00	$    1,556.00
Net sales	$        18,891.70	$    9,491.60
Accounts receivable turnover	6.1	6.1

.

	Nike	Adidas
Average Receivables	$ 3,097	$    1,556.00
Annual credit sales	$ 18,892	$ 9,492
No of days	365	365
Average Collection period	59.8	59.8