Information from three companles financial statements is shown below (amounts in millions). Beginning Accounts Ending Accounts Receivable Receivable $2,732 6,544 Net Sales Hamilton Derby Warner $1,785 6,016 599 $319,427 64,878 65,963 635 Required: 1. Calculate the recevables turnover ratio and the average collection perlod for Hamilton, Derby, and Warner. (Do not round Intermediate calculations. Enter your answers in millions. Round your "Average accounts recelvable" and "Recelvables turnover ratio" answers to one decimal place.) Receivables Turnover Ratio Receivables turnover ratio Hamilton Derby times times Warner times Average Collection Period Average collection period Hamilton Derby Warner days days days 2 Which company appears most efficlent in collecting cash from sales? O Hamilton O Derby O Warner
Information from three companles financial statements is shown below (amounts in millions). Beginning Accounts Ending Accounts Receivable Receivable $2,732 6,544 Net Sales Hamilton Derby Warner $1,785 6,016 599 $319,427 64,878 65,963 635 Required: 1. Calculate the recevables turnover ratio and the average collection perlod for Hamilton, Derby, and Warner. (Do not round Intermediate calculations. Enter your answers in millions. Round your "Average accounts recelvable" and "Recelvables turnover ratio" answers to one decimal place.) Receivables Turnover Ratio Receivables turnover ratio Hamilton Derby times times Warner times Average Collection Period Average collection period Hamilton Derby Warner days days days 2 Which company appears most efficlent in collecting cash from sales? O Hamilton O Derby O Warner
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:### Information from Three Companies' Financial Statements
Below is the information provided from three companies' financial statements (amounts in millions):
| Company | Beginning Accounts Receivable | Ending Accounts Receivable | Net Sales |
|-----------|--------------------------------|----------------------------|-------------|
| Hamilton | $1,785 | $2,732 | $319,427 |
| Derby | $6,816 | $6,344 | $64,878 |
| Warner | 599 | 635 | 65,963 |
---
### Required Calculations
1. **Calculate the Receivables Turnover Ratio and the Average Collection Period for Hamilton, Derby, and Warner.**
- Do not round intermediate calculations.
- Enter your answers in millions.
- Round your "Average Accounts Receivable" and "Receivables Turnover Ratio" answers to one decimal place.
#### Receivables Turnover Ratio
| Company | | = | Receivables Turnover Ratio |
|-----------|--------------------------------|---|----------------------------|
| Hamilton | | | |
| Derby | | | |
| Warner | | | |
- The column under "Receivables Turnover Ratio" is to be completed with the calculated turnover ratios for each company in terms of how many times the receivables are collected over the period.
#### Average Collection Period
| Company | | = | Average Collection Period |
|-----------|--------------------------------|---|---------------------------|
| Hamilton | | | days |
| Derby | | | days |
| Warner | | | days |
- The column under "Average Collection Period" is to be completed with the calculated number of days it takes for each company to collect its accounts receivable.
---
### Comparative Efficiency
2. **Which company appears most efficient in collecting cash from sales?**
Options:
- Hamilton
- Derby
- Warner
- This section is designed to determine which company is the most efficient in collecting receivables, inferred from the shortest average collection period.
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