Use the information below from Caterpillar€™s income statement and balance sheet to answer these questions:
1. Compute the company€™s 2004 average collection period for €œSales of Machinery and Engines.€ HINT: Use only €œReceivables€”trade and other€ in the computation.
2. Compute the company€™s 2004 average collection period for €œRevenues of Financial Products.€ HINT: Use only €œReceivables€”finance€ in the computation.
3. Compare the results from #1 and #2. Why the largedifference?

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2004 2003 2002 Sales and revenues: 1,915 30,251 1,715 22,763 1.504 20.152 Revenues of Financial Products Total sales and revenues Operating costs: 22,420 3,072 928 520 578 27,518 2,733 230 204 2,707 731 1,976 59 16.945 2,470 669 470 521 21,075 1.688 246 35 1,477 398 1,079 20 15.146 2.094 656 Cost of goods sold Research and development expenses Interest expense of Financial Products Other operating expenses 411 18.828 .324 279 69 ,114 312 802 Total operating costs. Operating profit Interest expense excluding Financial Products........... Other income (expense) Consolidated profit before taxes Provision for income taxes Profit of consolidated companies Equity in profit (loss) of unconsolidated affiliated companies... Profit. $2,035 1,099 798 2004 2003 2002 Assets Current assets: $ 445 342 309 3.192 5,066 1,145 781 .224 2.763 7,459 6,510 Receivables-trade and other Receivables- finance Retained interests in securitized trade receivables. Deferred and refundable income taxes Prepaid expenses Inventories 4,025 5,508 1.550 707 1,424 3,047 398 1,369 4,675 Total current assets... .$20,856 $16,603 $14.480