This information was extracted from recent annual reports of Starbucks Corporation:

\section*{Instructions}

(a) Assuming that all sales are credit sales, calculate the receivables turnover ratio and average collection period for Starbucks for 1996, 1995, and 1994.

(b) What factors might explain the changes in the values calculated in part (a)?

(c) The following quote is taken from the Management Discussion and Analysis of the 1996 annual report:
Starbucks presently derives approximately \(86 \%\) of net revenues from its Company-operated retail stores. The Company's specialty sales operations, which include sales to wholesale customers, licensees, and joint ventures, accounted for approximately \(11 \%\) of net revenues in fiscal 1996. Direct response operations (mail order) account for the remainder of net revenues.
What implications does this sales mix have for the calculations you made in part (a)? What are the implications for Starbucks' accounts receivable management?

Transcribed Image Text:

Net revenues Accounts receivable 1996 1995 1994 1993 $696,481 $465,213 $284,923 $176,541 17,621 9,852 5,394 2,862