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analyzing allowance for doubtful accounts receivables turnover ratio and days to col 727255

Analyzing Allowance for Doubtful Accounts, Receivables Turnover Ratio, and Days to Collect

Mattel and Hasbro are two of the largest and most successful toymakers in the world, in terms of the products they sell and their receivables management practices. To evaluate their ability to collect on credit sales, consider the following information reported in their annual reports (amounts in millions).

2008 20082007

 

 

Fiscal Year Ended:

 

Mattel

 

Hasbro

 

2006

2008

2007

2006

 

 

Net Sales

$5,918

$5,970

$5,650

$4,022

$3,838

$3,151

 

Accounts Receivable

900

1,012

963

644

686

584

 

Allowance for Doubtful Accounts

26

21

19

32

31

28

 

Accounts Receivable, Net of Allowance

874

991

944

612

655

556

 

Required:

1. Calculate the receivables turnover ratios and days to collect for Mattel and Hasbro for 2008 and 2007. (Round your final answers to one decimal place.)

2. Which of the companies was quicker to convert its receivables into cash in 2008? in 2007?

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