The following information was taken from the 2009 financial statements of FedEx Corporation, a major global transportation/delivery company.
|
(in millions) |
2009 |
2008 |
|
Accounts receivable (gross) |
$3,587 |
4,517 |
|
Accounts receivable (net) |
3,391 |
4,359 |
|
Allowance for doubtful accounts |
196 |
158 |
|
Sales |
35,497 |
37,953 |
|
Total current assets |
7,116 |
7,244 |
Instructions
Answer each of the following questions.
(a) Calculate the receivables turnover ratio and the average collection period for 2009 for FedEx.
(b) Is accounts receivable a material component of the company”s total current assets?
(c) Evaluate the balance in FedEx”s allowance for doubtful accounts.