The following information was taken from the 1998 financial statements of The Scotts Company.

Instructions Answer each of the following questions.

(a) Calculate the receivables turnover ratio and average collection period for 1998 for the company.

(b) Calculate the 1998 credit risk ratio for the company.

(c) Is accounts receivable a material component of the company’s total current assets?

Transcribed Image Text:

(in millions) Accounts receivable Allowance for uncollectible accounts Sales Total current assets 1998 $ 146.6 1997 $ 104.3 6.3 5.7 1,113.0 899.3 367.2 285.8