Required:

1. Compute the accounts receivable turnover for 2016 and 2015. At December 31, 2014, accounts and other receivables, net were $523.3 million.

2. Compute the days sales outstanding (DSO) for each year.

3. Does the number of days to collect receivables seem appropriate for Arm & Shovel?

4. How could Arm & Shovel improve its accounts receivable turnover?

The asset side of the 2016 balance sheet for Arm & Shovel (a furniture manufacturer) follows. The company reported net sales of $3,749.9 million in 2016 and $3,917.2 million in 2015. Use this information to answer the requirements: Dec. 31, 2016 Dec. 31, 2015 $281.9 $ 253.2 450.8 448.7 35.8 486.6 71.5 520.2 ARM & SHOVEL, INCORPORATED Consolidated Balance Sheets (excerpts) (in millions) Current Assets Cash and cash equivalents Trade receivables, net of allowance $7.2 and $9.3, at December 31, 2016 and 2015, respectively Other receivables, net Total receivables, net Inventories Finished goods Work in process Raw materials and supplies LIFO reserve Total inventories, net Prepaid expenses and other current assets Total current assets Property, plant and equipment - at cost Machinery and equipment Buildings and other Land Total property, plant and equipment Less accumulated depreciation Net property, plant and equipment Other Assets Goodwill Other intangibles, less accumulated amortization of $137.0 and $139.8 at December 31, 2016 and 2015, respectively Sundry Total other assets Total assets 255.7 52.6 245.1 (33.8) 519.6 36.8 1,324.9 242.8 42.6 241.8 (22.6) 504.6 33.2 1,311.2 1,133.8 559.4 37.7 1,730.9 (1,165.4) 565.5 1,099.1 548.2 40.0 1,687.3 (1,146.5) 540.8 791.3 806.1 164.9 188.4 137.5 1,093.7 $2,984.1 117.2 1,111.7 $2,963.7