P5-5 Interpreting accounts receivable turnover (LO 5-7)

Packaging Corporation of America produces containerboard and white papers. KapStone Paper and

Packaging Corporation manufactures unbleached kraft paper products and corru-

gated products. Financial statement data for these two companies follow:

Packaging Corporation of america
	2011	2012	2013	2014
Sales $		2,843.9	3,665.3	5,852.6
Accounts receivable at Dec31	320.0	352.1	643.1	646.1
KapStone paper and Packaging Corporation
Sales $		1,216.6	1,748.2	2,300.9
Accounts receivable at dec 31	108.3	111.6	232.3	228.7

Required: 1. Determine the receivables turnover ratios for both companies for 2012, 2013, and 2014. 2. Which company collected its accounts receivable more quickly in 2014? 3. Which company showed more improvement in accounts receivable collection over the period presented?

(please show formulas)