FINANCIAL AND MANAGERIAL ACCTG W/ACC CRD
9th Edition
ISBN: 9781266515071
Author: Wild
Publisher: MCG CUSTOM
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Chapter 7, Problem 2.2AA
To determine
Introduction: Financial ratios help in comparing the performance of the company with its previous performance as well as that of competitors in the industry. They are divided into four building blocks. These blocks are liquidity and efficiency, solvency, profitability, and market prospects.
The company more quickly collects its accounts receivable in the current year.
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Comparative figures for Apple and Google follow.
Apple
$ millions
Accounts receivable, net
Net sales
Current Year
$ 22,926
260,174
One Year
Prior
$ 23,186
265,595
Two Years
Prior
$ 17,874
229,234
Current Year
$ 25,326
161,857
Required:
Google
One Year
Prior
$ 20,838
136,819
Two Years
Prior
$ 18,336
110,855
1. Compute the accounts receivable turnover for the two most recent years for (a) Apple and (b) Google.
2. Which company more quickly collects its accounts receivable in the current year?
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Compute the accounts receivable turnover for the two most recent years for (a) Apple and (b) Google.
Note: Round your answers to 1 decimal place.
Accounts Receivable Turnover
Current Year
Prior Year
a. Apple
b. Google
times
times
times
times
A Financial Analysis Statement
Calculate the 2021 (year ended 12/31/21) current ratio for Twitter. Calculate the 2021 (year ended 12/31/2021) current ratio for Meta. Which company has a better current ratio and why? Explain in a short paragraph. Calculate the 2021 accounts receivable turnover ratio for Twitter. Calculate the 2021 accounts receivable turnover ratio for Meta. Calculate the average collection period for each company.
Show answer as number of days plus 2 decimals.
Which company has a better receivable turnover ratio and why? Explain in a short paragraph. Calculate the 2021 return on assets for Twitter. Calculate the 2021 return on assets for Meta. Which company has a better return on assets and why? Explain in a short paragraph. Calculate the 2021 debt-to-equity ratio for Twitter. Calculate the 2021 debt-to-equity ratio for Facebook. Describe in a short paragraph what the debt-to-equity ratio measures and why this would be important to a potential creditor.…
Use the following financial statement information from Black Water Industries.
BLACK WATER INDUSTRIES
Ending Accounts
Receivable
Year
Net Credit Sales
2017
$690,430
$335,250
2018
705,290
364,450
2019
770,500
406,650
A. Compute the accounts receivable turnover ratios for 2018 and 2019. Round your
answers to two decimal places.
2018
times
2019
times
B. Using the accounts receivable turnover, choose the statement that most closely
describes the company's management of its receivables.
a. The company's lending policies may be too strict.
b. Collection efforts are not aggressive enough.
There may be uncollectable receivables affecting the beginning and ending
C.
balances.
d. All of the above statements may be correct.
a
b
d
Chapter 7 Solutions
FINANCIAL AND MANAGERIAL ACCTG W/ACC CRD
Ch. 7 - Prob. 1QSCh. 7 - Prob. 2QSCh. 7 - Prob. 3QSCh. 7 - QS 7-4 Distinguishing between allowance method and...Ch. 7 - Prob. 5QSCh. 7 - Prob. 6QSCh. 7 - Prob. 7QSCh. 7 - Prob. 8QSCh. 7 - Prob. 9QSCh. 7 - Prob. 10QS
Ch. 7 - Prob. 11QSCh. 7 - Prob. 12QSCh. 7 - Prob. 13QSCh. 7 - Prob. 14QSCh. 7 - Prob. 15QSCh. 7 - Prob. 16QSCh. 7 - Prob. 17QSCh. 7 - Prob. 18QSCh. 7 - Prob. 19QSCh. 7 - Prob. 20QSCh. 7 - Prob. 21QSCh. 7 - Prob. 1ECh. 7 - Prob. 2ECh. 7 - Prob. 3ECh. 7 - Prob. 4ECh. 7 - Prob. 5ECh. 7 - Prob. 6ECh. 7 - Prob. 7ECh. 7 - Prob. 8ECh. 7 - Prob. 9ECh. 7 - Prob. 10ECh. 7 - Prob. 11ECh. 7 - Prob. 12ECh. 7 - Prob. 13ECh. 7 - Prob. 14ECh. 7 - Prob. 15ECh. 7 - Prob. 16ECh. 7 - Prob. 17ECh. 7 - Prob. 18ECh. 7 - Prob. 19ECh. 7 - Prob. 20ECh. 7 - Prob. 21ECh. 7 - Prob. 22ECh. 7 - Prob. 23ECh. 7 - Prob. 1PSACh. 7 - Prob. 2PSACh. 7 - Prob. 3PSACh. 7 - Prob. 4PSACh. 7 - Prob. 5PSACh. 7 - Prob. 1PSBCh. 7 - Prob. 2PSBCh. 7 - Prob. 3PSBCh. 7 - Prob. 4PSBCh. 7 - Prob. 5PSBCh. 7 - Prob. 7SPCh. 7 - Prob. 1.1AACh. 7 - Prob. 1.2AACh. 7 - Prob. 1.3AACh. 7 - Prob. 1.4AACh. 7 - Prob. 2.1AACh. 7 - Prob. 2.2AACh. 7 - Prob. 3.1AACh. 7 - Prob. 3.2AACh. 7 - Prob. 1DQCh. 7 - Prob. 2DQCh. 7 - Prob. 3DQCh. 7 - Prob. 4DQCh. 7 - Prob. 5DQCh. 7 - Prob. 6DQCh. 7 - Anton Blair is the manager of a medium-size...Ch. 7 - Prob. 2BTNCh. 7 - Prob. 3BTNCh. 7 - Prob. 4BTNCh. 7 - Prob. 5BTN
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- Comparative figures for Apple and Google follow. Apple One Year Prior $ 15,754 215,639 Google Current Year $ 17,874 229,234 Two Years Prior $ 16,849 233,715 Current Year $ 18,336 110,855 Two Years Prior $11,556 74,989 One Year Prior $ millions Accounts receivable, net Net sales $14,137 90,272 Required: 1. Compute the accounts receivable turnover for (a) Apple and (b) Google for each of the two most recent years using the data shown. 2. Compute how many days, on average, it takes to collect receivables for the two most recent years for (a) Apple and (b) Google. 3. Which company more quickly collects its accounts receivable in the current year?arrow_forwardUsing the following select financial statement information from Mover Supply Depot, compute the accounts receivable turnover ratios for 2018 and 2019 (round answers to two decimal places). What do the outcomes tell a potential investor about Mover Supply Depot if the industry average is 4 times?arrow_forwardUsing the following select financial statement information from Black Water Industries, compute the accounts receivable turnover ratios for 2018 and 2019 (round answers to two decimal places). What do the outcomes tell a potential investor about Black Water Industries?arrow_forward
- The following select financial statement information from Vortex Computing. Compute the accounts receivable turnover ratios and the number of days sales in receivables ratios for 2018 and 2019 (round answers to two decimal places). What do the outcomes tell a potential investor about Vortex Computing if industry average for accounts receivable turnover ratio is 4 times and days sales in receivables ratio is 85 days?arrow_forwardReview the select information for Bean Superstore and Legumes Plus (industry competitors), and then complete the following. A. Compute the accounts receivable turnover ratios for each company for 2018 and 2019. B. Compute the number of days sales in receivables ratios for each company for 2018 and 2019. C. Determine which company is the better investment and why. Round answers to two decimal places.arrow_forwardThe following select financial statement information from Candid Photography. Compute the accounts receivable turnover ratios and the number of days sales in receivables ratios for 2018 and 2019 (round answers to two decimal places). What do the outcomes tell a potential investor about Candid Photography if industry average for accounts receivable turnover ratio is 3 times and days sales in receivables ratio is 150 days?arrow_forward
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