Mathis and Hashey are two of the largest and most successful toymakers in the world, in terms of the products they sell and their receivables management practices. To evaluate their ability to collect on credit sales, consider the following information reported in their annual reports (amounts in millions).

Mathis Hashey Fiscal Year Ended:
2012 2011 2010 2012 2011 2010
Net Sales $4,156 $3,631 $4,318 $2,302 $2,268 $2,422
Accounts Receivable 1,088 694 820 912 992 564
Allowance for Doubtful Accounts 14 17 18 23 25 24
Accounts Receivable, Net of Allowance 1,074 677 802 889 967 540

Required:

Calculate the receivables turnover ratios and days to collect for Mathis and Hashey for 2012 and 2011.

TIP: In your calculations, use average Accounts Receivable, Net of Allowance.

(Use 365 days in a year. Do not round intermediate calculations on Accounts Receivable Turnover Ratio. Round your final answers to 1 decimal place. Use final rounded answers from Accounts Receivable Turnover Ratio for Days to Collect ratio calculation.)

Answer :

tanseershar

Answer:

The answer is  given below;          

Explanation:                              Mathis         Amount in $         Hashey

                                             2011                        2012          2011         2012

Net Sales                        3,631                          4,156              2,268      2,302

A/R-Net                             677                             1,074                967           889

A/R Turnover                3,631/(677+802)   4156/(677+1074)  2,268/(967+540)

                                                                                                         2,302/(889+967)

(Net Sales/Average net receivable)

 A/R Turnover                2.5                             2.4              1.5              1.2

Days to collect    

(Average Receivables/Sales)*365

                               677+802/(3631)     677+1074/(4156)     967+540/(2,268)  889+967/(2,302)

Average days to collect  149                        154                       242             294                                  

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