CP8-5 (Algo) Analyzing Allowance for Doubtful Accounts, Receivables Turnover Ratio, and Days to Collect [LO 8-4]

Hashey Companies and Nez Toys are two of the largest and most successful toymakers in the world, in terms of the products they sell and their receivables management practices. To evaluate their ability to collect on credit sales, consider the following information reported in their annual reports (amounts in millions).

Fiscal Year Ended:	Hashey	Nez
2018	2017	2016	2018	2017	2016
Net Sales	$ 5,456	$ 4,931	$ 5,518	$ 3,602	$ 3,468	$ 3,622
Accounts Receivable	1,148	754	880	972	1,052	624
Allowance for Doubtful Accounts	20	23	24	29	31	30
Accounts Receivable, Net of Allowance	1,128	731	856	943	1,021	594

Required:

1. Calculate the receivables turnover ratios and days to collect for Hashey and Nez for 2018 and 2017. TIP: In your calculations, use average Accounts Receivable, Net of Allowance.

2-a. Which of the companies was quicker to convert its receivables into cash in 2018?

2-b. Which of the companies was quicker to convert its receivables into cash in 2017?