Accounts Receivable and Inventory Turnover

The following data (in millions) were adapted from recent financial statements of Apple Inc (AAPL).

Year 2

Year 1

Sales

$233,715

$182,795

Cost of goods sold

140,089

112,258

Operating income

71,230

52,503

Average accounts receivable

33,713

27,816

Average inventory

2,230

1,938

1. Compute the accounts receivable turnover for Years 1 and 2. Round to one decimal place.

Accounts Receivable Turnover

Year 2

Year 1

2. Compute the number of days' sales in receivables for Years 1 and 2. Assume there are 365 days in a year, and round to nearest day.

Number of Days' Sales

in Receivables

Year 2

days

Year 1

days

3. Compute the inventory turnover for Years 1 and 2. Round to one decimal place.

Inventory Turnover

Year 2

Year 1

4. Compute the number of days' sales in inventory for Years 1 and 2. Assume there are 365 days in a year, and round to nearest day.

Number of Days' Sales

in Inventory

Year 2

days

Year 1

days

5. Compute the return on sales for Years 1 and 2. Round to one decimal place.

Return on Sales

Year 2

%

Year 1

%

6. Apples accounts receivable turnover in Year 2 has slightly. Days sales in receivables has . This is a change. Apples inventory turnover in Year 2 has slightly. Days sales in inventory has . Apples return on sales in Year 2 has . This a change.