The Campbell Soup Company manufactures and markets food products throughout the world. The following sales and receivable data (in millions) were reported by Campbell Soup for two recent years: Year 2 Year 1 $8,082 $8,268 Sales 670 Accounts receivable 647 Assume that the accounts receivable (in thousands) were $635 million at the beginning of Year 1. a. Compute the accounts receivable turnover for Year 2 and Year 1. Round average ac- counts receivable to one decimal place and accounts receivable turnover to two decimal places. b. Compute the days' sales in receivables at the end of Year 2 and Year 1. Use 365 days and round to one decimal place. What conclusions can be drawn from these analyses regarding Campbell's C. efficiency in collecting receivables? American Eagle Outfitters, Inc. sells clothing, accessories, and personal care products for men and women through its retail stores. American Eagle reported the following data (in millions) for two recent years: Year 2 Year 1 Sales $3,522 $3,283 Accounts receivable 68 81 Assume that accounts receivable (in millions) were $74 million at the beginning of Year 1. a. Compute the accounts receivable turnover for Year 2 and Year 1. Round to two decimal places. b. Compute the day's sales in receivables for Year 2 and Year 1. Use 365 days and round to one decimal place. c. What conclusions can be drawn from these analyses regarding American Eagle Outfitters' efficiency in collecting receivables?

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter9: Receivables

Section: Chapter Questions

Problem 27E

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Use the data in Exercises 9-27 and 9-28 to analyze the accounts receivable turnover ratios of the Campbell Soup Company and American Eagle Outfitters, Inc.
a. Compute the average accounts receivable turnover ratio for Campbell Soup and American Eagle for the years shown in Exercises 9-27 (See attachment) and 9-28 (See attachment).
b. Does Campbelll Soup or American Eagle have the higher average accounts receivable turnover ratio?
c. Explain why the average turnover ratios are different in (b).

The Campbell Soup Company manufactures and markets food products throughout the
world. The following sales and receivable data (in millions) were reported by Campbell
Soup for two recent years:
Year 2
Year 1
$8,082
$8,268
Sales
670
Accounts receivable
647
Assume that the accounts receivable (in thousands) were $635 million at the beginning of Year 1.
a. Compute the accounts receivable turnover for Year 2 and Year 1. Round average ac-
counts receivable to one decimal place and accounts receivable turnover to two decimal
places.
b. Compute the days' sales in receivables at the end of Year 2 and Year 1. Use 365 days
and round to one decimal place.
What conclusions can be drawn from these analyses regarding Campbell's
C.
efficiency in collecting receivables?

American Eagle Outfitters, Inc. sells clothing, accessories, and personal care products for
men and women through its retail stores. American Eagle reported the following data
(in millions) for two recent years:
Year 2
Year 1
Sales
$3,522
$3,283
Accounts receivable
68
81
Assume that accounts receivable (in millions) were $74 million at the beginning of Year 1.
a. Compute the accounts receivable turnover for Year 2 and Year 1. Round to two decimal
places.
b. Compute the day's sales in receivables for Year 2 and Year 1. Use 365 days and round
to one decimal place.
c. What conclusions can be drawn from these analyses regarding American Eagle Outfitters'
efficiency in collecting receivables?

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