thoughtfully respond to these posts (this is a discusion board) (75 words min)

This is the official post to respond to: The net receivables at the end of 2020 for Avon was $259.1 million. The bad debt expense for the year was $78.3 million. To calculate the receivables tumover ratio, the equation is Net Credit Sales divided by average accounts receivable. I located the Net Credit Sales from the Consolidated Statement of Operations, which was $3,431.2. To calculate average accounts receivable we add beginning receivables of $310.2 (259.1+51.1) and ending receivables of $346.8 (280.2+66.6) which is found by locating 2019's ending amount. These added together and divided by 2 compute $328.5 in average accounts receivables. Then we divide $3,431.2 by $328.5 to give us a receivables turnover ratio of 10.4. To compute the average collection period, we take 365 days divided by the receivables turnover ratio we just calculated of 10.4, to give us an average collection period of 35.1 days Assuming the industry average for the receivables turnover ration of 10.5 and average collection period of 34.8, it would appear that Avon's 10.4 and 35.1 would put this company in good standing in regards to falling into the industry standards for how efficient the company is at collecting its accounts receivables which allows them to stay competitive and relevant in their industry. Reply (This is a student reply) For the net receivables and bad debt expense, I got the same values as you. But for the receivables turnover ratio, wouldn't the average accounts receivable be $269.65? I got this value by adding the accounts receivable for 2020 and 2019.259.1 and 280.2 respectively, and then dividing by two. Reply I obtained a copy of the annual report of Avon Products, Inc. using the sec.gov link because the Avon website was too convoluted and I could not find the investor tab/link. 1. The amount of net receivables at the end of the year is $259.1. 2. The amount of bad debt expense for the year is listed as "provision for doubtful accounts" $78.3. 3. The receivables turnover ratio is 42.1 and average collection period for 2020 is 8.7 days. 1. Assuming the industry averages for the receivables turnover ratio and average collection period at 10.5 times and 34.8 days, respectively. what do you conclude about the receivables of Avon? While the receivables turnover ratio is high, the collection period is very short. This means that the company, Avon, can reasonably afford their payments. (I really hope I did this correctly because I feel like I have no clue what I'm talking about!)