a) Calculate the 2021 accounts receivable turnover ratio for Twitter.
= Net credit sales/ Average accounts receivables
=
b) Calculate the 2021 accounts receivable turnover ratio for Meta.
= Net credit sales/ Average accounts receivables
=
c) Calculate the average collection period for each company.
Show answer as number of days plus 2 decimals.
d) Which company has a better receivable turnover ratio and why? Explain in a short paragraph.
TWITTER, INC. Critical Audit Mlatters CONSOLIDATED BALANCE SHEETS any waf our oprion on the consolicated tnancial sabbements, taken as a whoie, and wo are not, by communicating the critical aude. matter below, prowid ng a separate opin on on the crital aualt matter or on the accounts or dsclosures to which ti. reiales. As described in Nates 1 and 2 ta the cansoldaded financisl shatemenes, the Company generatod s4.5 hilin of is revenue from the sake of adeertising hddreseng the matter imsolved perlorming procecures and evdlusing sudt evidence in connection with forming our overal opirion on the over the identfisation of perfomance obigasons. These procedures also ncided, ameng of eres, examining revenue arrangements on a test basis and iesting management's precess for li debentining whether the crteria for reverue recognition have been met based on the tents and performance under the arrangement, and (1) ideritying perionmanoe chlgations and, where appikabic, deiemiring whether the Company is the principal or apert for the performance obligation idevtificd. is Pricewaberhousecoopers LLP San Franevex, Cailonia Fatruery 1f, 20%2 Wo heron berued se the Company's audior sinen 2000 The accomperying noles are an integral pert of the ce caradideled finsreial stalemerts. TWITTER, INC. TMITTER, INC. CONSOLIDATED STATEMENTS OF OPERATIONS CONSOUDATED STATEMENTS OF COMPREHENSINE INCOME (LOSS) Oln thousands, except per share data) (In thousands) The scoampanying nores are sn integryi part of these conedidated francigi stsiements. TWITTER, INC. The accompanying nobes are an integral part of these consaldatod financial statemens. META PLATFORMS, INC. META PLATFORUS, INC. CO vQOTIDATF.D STATF.MFNTS OF INCOMF. gin willon, exor per sare awouds COVSOT.TDATED STATEMFVTS OF COMPREHENSIVE. INCOME (2v aimlons, Sec Accusponsing Nons to Cenoliaved Pruncial Sunsweus. MET. AI.A TERESAS INr META PL.ATFCRRMS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Te ivilinacri 82 MET.A PI.ATFORMK, INC.. NOTES TO CXNSOI.ID.ATFD FIVA NCIAI STATEMENTS Note 1. Summary of Significant Accounting Pelieics Orgunization and Drrigintion of Baxisess Wo were incorporated in Delawaro in July 2004. In Orvober 2ve1, wo changed our corporate name from Facebook, Inc. to Mesa Platforms, [ne. Our mission is to givv poople twe power to brild coenmunity and bring the woeld eloser soguter. All of our procuck, incheding our apps, share the vision of helping to bring the inetaverse wo lifte. the chief operating decision make (CODM), who is our Chicf Executive Office (CEO), roviews and macsees the business. We penerais subsiantially all of onr revenue from advetising. Bas sy Presenfanion Soc Anconponying Noses to Consondabed FTinancia Swusenwtr. stasements include the zocounts of Matz Pledoms, lro., its subadianes ahere we hove controlling financial interests, und any variable interest entices tor which I. of of Futirusles 84 the cocsolidabed financal staxements and zocompensing noves. These sermotes focm the basis for podgments we make about the carrying values of our assecs and to revenoe recogntion, valuocion of equity investments, income twoes. bos conciegencjes, valuzhen of long-lived assets inchading goodanll, intangeble assecs, and undertake in the future. Actual resuls conkd ditfer materially trom those ertimates. Lives prospectively. Renae Revguiman R.venus is recopeined ahen control of the promised goods or services is transfered oo our customers, in an amounc that reflects the considesarion we expect We deternine revenue rocigatiza hy arplying the follawing siepa: - Lientification of the enntrast, er eontracts, with 2 castamst; - identification of the periocmance obligabons in the conerat; - devermination of the transuction prios; - rcosgnition of reverue wben, or as, ws sacisfy a performznce obligation
