Mirador Products Co. is a major consumer goods company that sells over 3,000 products in 135 countries. The company’s annual report to the Securities and Exchange Commission presented the following data (in thousands) pertaining to net sales and accounts related to accounts receivable for 2007, 2006, and 2005.

1. Compute the ratio of uncollectible accounts expense to net sales and to accounts receivable, and the ratio of allowance for uncollectible accounts to accounts receivable for 2007, 2006, and 2005.
2. Compute the receivable turnover and days’ sales uncollected for each year, assuming 2004 net accounts receivable were $930,000,000.

3. What is your interpretation of the ratios? Describe management’s attitude toward the collectibility of accounts receivable over the three-year period.
Annual Report Case: CVS Corporation Cash and Receivables

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2007 2006 2005 Net sales Accounts receivable Allowance for uncollectible accounts Uncollectible accounts expense Uncollectible accounts written off Recoveries of accounts previously written off $9,820,000 $9,730,000 $9,888,000 1,046,000 1,048,000 1,008,000 37,200 42,400 49,000 30,000 33,400 31,600 38,600 40,200 35,400 3,400 200 2,000