Obtain Whirlpool's Fiscal 2016 10-K (filed Feb. 13, 2017) through the ''Investor Relations'' portion of its website (do a web search for Whirlpool investor relations). Once at the Investor Relations section of the website, look for ''SEC Filings'' under the ''FINANCIAL INFORMATION'' header. When you see the list of all the filings, either filter for the ''Annual Filings'' or search for ''10-K.'' Another option is to go to www.sec.gov and click ''Company Filings Search'' under ''Filings.''
Required:
1. Look at the ''Accounts Receivable'' heading to Note 1 (Summary of Significant Accounting Policies). Do you think Whirlpool uses the percentage of credit sales method or the aging method to estimate bad debt expense?
2. Looking at the Balance Sheet, what was Whirlpool's allowance for doubtful accounts at December 31, 2015 and 2016?
3. Was a larger percentage of the gross accounts receivable considered uncollectible at fiscal year end 2015 or 2016?
4. Calculate Whirlpool's receivables turnover for fiscal 2015 and 2016 (Accounts Receivable, net, was $2,768 at the end of fiscal 2014). If the industry average for receivables turnover is 6.14, how do you evaluate their efficiency with receivables?
5. Calculate Whilrpool's gross profit margin, operating margin, and net profit margin for fiscal 2015 and 2016.
6. If the industry average for the gross profit margin is 32.55%, what sort of strategy do you think Whirlpool is pursuing?