Abbott Laboratories is a diversified health care company devoted to the discovery, development, manufacture, and marketing of innovative products that improve diagnostic, therapeutic, and nutritional practices. Abbott markets products in more than 130 countries and employs 50,000 people. Pfizer Inc. is a research-based, global health care company. Its mission is to discover and develop innovative, value-added products that improve the quality of life of people around the world. Pfizer manufactures products in 31 countries and markets these products worldwide. These two companies reported the following information in their financial reports:

Required

a. Calculate the accounts receivable turnover and the average collection period for Abbott Laboratories and Pfizer Inc. for 2017.

b. Compare the average collection periods for the two companies and comment on possible reasons for the difference in average collection periods for the two companies.

Transcribed Image Text:

(in millions) 2017 Abbott Laboratories Net sales... $27,390 Beginning accounts receivable (net).. 3,248 Ending accounts receivable (net).. 5,249 Pfizer Inc. Net sales... Beginning accounts receivable (net). Ending accounts receivable (net). $52,546 8,225 8,221