The Campbell Soup Company manufactures and markets food products throughout the world. The following sales and receivable data (in millions) were reported by Campbell Soup for two recent years:

Assume that the accounts receivable were $638 million at the beginning of Year 1.

a. Compute the accounts receivable turnover for Year 2 and Year 1. Round average accounts receivable to one decimal place and accounts receivable turnover to two decimal places.
b. Compute the days’ sales in receivables for Year 2 and Year 1. Use 365 days and round to one decimal place.
c. What conclusions can be drawn from these analyses regarding Campbell’s efficiency in collecting receivables?

Transcribed Image Text:

Year 2 Year 1 Sales $8,685 $7,890 Accounts receivable 805 616