EX 9-27 Accounts receivable turnover and days’ sales in receivables
H.J. Heinz Company was founded in 1869 at Sharpsburg, Pennsylvania, by Henry J. Heinz. The company manufactures and markets food products throughout the world, including ketchup, condiments and sauces, frozen food, pet food, soups, and tuna. For the fiscal years 2009 and 2008, H.J. Heinz reported the following (in thousands):
|
Year Ending |
||
|
April 29, 2009 |
April 30, 2008 |
|
|
Net sales |
$10,148,082 |
$10,070,778 |
|
Accounts receivable |
1,171,797 |
1,161,481 |
Assume that the accounts receivable (in thousands) were $996,852 at the beginning of
fiscal year 2008.
a. Compute the accounts receivable turnover for 2009 and 2008. Round to one decimal place.
b. Compute the days’ sales in receivables at the end of 2009 and 2008. Round to one decimal place.
c. What conclusions can be drawn from these analyses regarding Heinz’s efficiency in collecting receivables?