the CEO of Smith Corp., a company that you are analyzing, displays the following sales numbers for fiscal years 2016 through 2018 while proclaiming, "our 2018 sales number continues our trend of steadily increasing and high-quality revenues."

Net Sales: Year 2018 - 887,061 Year 2017 - 810,101 year 2016 - 742,531

You are skeptical and review the details to smith's accounts receivables in their account receivable footnote and find the following information:

2018 2017 2016

Gross Accounts Receivables 390,307 352,394 323,010

Allowance for Bad debts 40,006 40,533 37,152

Net A/R (reported on B/S) 350,300 311,861 285, 858

(1) Using only the information above, provide three (3) conclusions related to Smith's use of account receivables (as well as the related allowance account if necessary) that an analyst should make when analyzing Smith's Net Sales. FOCUS YOUR CONCLUSIONS ON FISCAL YEAR 2018.

(2) In further analyzing Smith's financial statements related to their accounts receivables, you discover that in 2018, Smith sold some of their receivables through a securitization process. Most of the other firms in Smith's industry DID NOT SELL any receivables, and Smith HAS NOT DONE THIS CONSISTENTLY in the past. Assuming all else equal, how would this information affect, if at all, your analysis of Smith's accounts receivables and allowance account?