P5-51. Analyzing Segment Disclosures Raytheon Company disclosed the following data related to segment sales and operating profits for fi scal 201 8.

Total Net Sales Operating Income

$millions 2018 2017 2016 2018 Integrated defense systems ... .. .. .. . . $ 6,180 $ 5,804 $ 5,529 $1,023 Intelligence, information and services ... 6,722 6,177 6,169 538 Missile systems . ........ .. .. ... .. . . 8,298 7,787 7,096 973 Space and airborne systems . ......... 6,748 6,430 6,182 884 Forcepoint. . ............ . .... . ..... 634 608 586 5 Eliminations ............. . ......... (1,514) (1,423) (1,361)

Total net sales ..................... $27,068 $25,383 $24,201 The company also reported the fo llowing on its balance sheet.

$ millions 2018 Receivables, net of allowance for doubtful accounts of $12 and $8. . . . . . . . . . . $1 ,648 Required 2017 2016

$ 935 $971 455 467 1,010 921 862 808 33 90 2017

$1 ,324

a. Which segment is largest in 20 18? Has this ranking changed over the three-year period?

b. Calculate the operating profit margin for each segment and determine which segment is most profitable in 2018 by this measure.

c. Which segment's sales grew the most in 2018? How does this compare to 20 17 sales growth?

d. Calculate the company's accounts receivable turnover and its days sales outstanding (DSO) for 2018.

Does this seem reasonable? What might explain the DSO?

e. Assess the size of the receivables allowance. Does it seem reasonable?