Particulars Procter & Gamble Colgate-Palmolive Net Sales 2018 66832 15544 Accounts Receivables 2018 4686 1400 Accounts Receivables 2017 4594 1480 Average Receivables (4686+4594)/2 = 4640 (1400+1480)/2 = 1440 Accounts Receivables Turnover Ratio = Net Credit Sales ÷ Average Receivables 66832/4640 = 14.40 15544/1440 = 10.79 DSO = Accounts Receivables ÷ Net Credit Sales × 365 14.40/66832 = 25.34 10.79/15544 = 33.81 A) Identify and discuss a potential explanation for the difference between these competitors’ Accounts receivable ratios

Particulars Procter & Gamble Colgate-Palmolive Net Sales 2018 66832 15544 Accounts Receivables 2018 4686 1400 Accounts Receivables 2017 4594 1480 Average Receivables (4686+4594)/2 = 4640 (1400+1480)/2 = 1440 Accounts Receivables Turnover Ratio = Net Credit Sales ÷ Average Receivables 66832/4640 = 14.40 15544/1440 = 10.79 DSO = Accounts Receivables ÷ Net Credit Sales × 365 14.40/66832 = 25.34 10.79/15544 = 33.81 A) Identify and discuss a potential explanation for the difference between these competitors’ Accounts receivable ratios

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 12MC: South Rims has an accounts receivable balance at the end of 2018 of $357,470. The net credit sales...

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Particulars	Procter & Gamble	Colgate-Palmolive
Net Sales 2018	66832	15544
Accounts Receivables 2018	4686	1400
Accounts Receivables 2017	4594	1480
Average Receivables	(4686+4594)/2 = 4640	(1400+1480)/2 = 1440
Accounts Receivables Turnover Ratio = Net Credit Sales ÷ Average Receivables	66832/4640 = 14.40	15544/1440 = 10.79
DSO = Accounts Receivables ÷ Net Credit Sales × 365	14.40/66832 = 25.34	10.79/15544 = 33.81