Below are amounts (in millions) from three companies' annual reports. Beginning Accounts Receivable Ending Accounts Receivable Net Sales WalCo $ 1,625 $ 2,572 $ 303,427 TarMart 5,216 5,744 48,878 CostGet 439 475 49,963 Required: 1. Calculate the receivables turnover ratio and the average collection period for WalCo, TarMart and CostGet

1. Accounts Receivable Turnover

Walco 144.59 Times

Tarmart 8.9 Times

Costget 109.33 Times

Average collection period

Walco 2.52 Days

Tarmart 41.01 Days

Costget 3.34 Days

2. Walco

Explanation:

1. Calculation to determine the receivables turnover ratio and the average collection period for WalCo, TarMart and CostGet

ACCOUNTS RECEIVABLE TURNOVER

Using this formula

Accounts Receivable Turnover=Net Sales/Average Accounts receivable

Walco=$ 303,427/($ 1,625+2,572)/2

Walco=$ 303,427/$2,098.5

Walco =144.59 Times

Tarmart= 48,878/(5,216 + 5744)/2

Tarmart= 48,878/5480

Tarmart= 8.9 Times

Costget= 49,963/(439 + 475)/2

Costget= 49,963/457

Costget= 109.33 Times

Therefore the receivables turnover ratio is :

Walco 144.59 Times

Tarmart 8.9 Times

Costget 109.33 Times

AVERAGE COLLECTION PERIOD

Using this formula

Average collection period=Average Collection Period

365/Receivables turnover ratio

Let plug in the formula

Walco= 365.00/144.59 Walco=2.52 Days

Tarmart= 365.00/8.9

Tarmart= 41.01 Days

Costget= 365.00/109.33

Costget=3.34 Days

2. Based on the above calculation the company that appears MOST EFFICIENT in collecting cash from sales is WALCO 144.59 Times.

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to 1800. they made a barrier to prevent further european exploration from

entering the africa from the north. however, the dutch ware still able to move

toward the interior with having south africa as one of the routes leading to

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