Nestl's financial statements are presented in Appendix B. Financial statements of Petra Foods are presented in Appendix

Question:

Nestlé's financial statements are presented in Appendix B. Financial statements of Petra Foods are presented in Appendix C.

Instructions

(a) Based on the information in these financial statements, compute the following ratios for each company for the most recent fiscal year shown. (Assume all sales are credit sales and that all receivables are trade receivables.)

(1) Accounts receivable turnover.

(2) Average collection period for receivables.

(b) What conclusions about managing accounts receivable can you draw from these data?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...