Suppose the information below is from the 2014 financial statements and accompanying notes of The Scotts Company, a major manufacturer of lawn-care products.

Instructions
Answer each of the following questions.
(a) Calculate the accounts receivable turnover and average collection period for 2014 for the company.
(b) Is accounts receivable a material component of the company’s total 2014 current assets?
(c) Scotts sells seasonal products. How might this affect the accuracy of your answer to part (a)?
(d) Evaluate the credit risk of Scotts’ 2014 concentrated receivables.
(e) Comment on the informational value of Scotts’ Note 19 on concentrations of creditrisk.

Transcribed Image Text:

(in millions) 2014 270.4 Accounts receivable Allowance for uncollectible accounts Sales revenue Total current assets 2013 259.7 2,871.8 10.6 11.4 2,981.8 1,044.9 999.3