CP 9-4 Accounts receivable turnover and days’ sales in receivables
Apple Computer, Inc., designs, manufactures, and markets personal computers and related personal computing and communicating solutions for sale primarily to education, creative, consumer, and business customers. Substantially all of the company’s net sales over the last five years are from sales of its Macs, iPods, iPads, and related software and peripherals. For two recent fiscal years, Apple reported the following (in millions):
|
Year Ending |
||
|
Sept. 26, 2009 |
Sept. 27, 2008 |
|
|
Net sales |
$36,537 |
$32,479 |
|
Accounts receivable at end of year |
3,361 |
2,422 |
Assume that the accounts receivable (in millions) were $1,637 at the beginning of fiscal year 2008.
1. Compute the accounts receivable turnover for 2009 and 2008. Round to one decimal place.
2. Compute the days’ sales in receivables at the end of 2009 and 2008. Round to one decimal place.
3. What conclusions can be drawn from (1) and (2) regarding Apple’s efficiency in collecting receivables?