Mikey Inc. designs, develops, markets, and sells athletic footwear, apparel, equipment, and accessories worldwide. Armer Inc. develops, markets, and distributes branded performance apparel, footwear, and accessories for men, women, and youth. The following financial information is reported by both companies.   $ millions Accounts Receivable Year 3 Accounts Receivable Year 2 Accounts Receivable Year 2 Sales Year 3 Sales Year 2 Mikey Inc. $4,537.4 $3,358.0 $4,925.7 $45,326.4 $39,781.3 Armer Inc. 563.7 332.3 347.6 5,945.0 4,009.7   Required a. Compute the accounts receivable turnover ratio and the average days to collect receivables for year three and for year two for both Mikey Inc. and Armer Inc.   Note: Round your answers to two decimal places. Accounts receivable turnover Year 3 Year 2 Mikey Inc. Answer Answer Armer Inc. Answer Answer Average days to collect receivables Year 3 Year 2 Mikey Inc. Answer Answer Armer Inc. Answer Answer b. Analyze the year-to-year results for both companies.   Trends in Year 3 as compared to Year 2 for the Mikey Inc.indicate a   Answer Indicated by the accounts receivable turnover ratio Answer Indicated by the average days to collect receivables   These results indicate the following when comparing financial conditions of Year 2 to Year 3: Answer     Trends in Year 3 as compared to Year 2 for Armer Inc. indicate a   Answer Indicated by the accounts receivable turnover ratio Answer Indicated by the average days to collect receivables   These results indicate the following when comparing financial conditions of Year 2 to Year 3: Answer Please answer all parts of the question.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Performing Ratio Analysis of Receivables and Interpreting the Results

Mikey Inc. designs, develops, markets, and sells athletic footwear, apparel, equipment, and accessories worldwide. Armer Inc. develops, markets, and distributes branded performance apparel, footwear, and accessories for men, women, and youth. The following financial information is reported by both companies.

 



$ millions

Accounts
Receivable

Year 3
Accounts
Receivable
Year 2
Accounts
Receivable
Year 2

Sales
Year 3

Sales
Year 2
Mikey Inc. $4,537.4 $3,358.0 $4,925.7 $45,326.4 $39,781.3
Armer Inc. 563.7 332.3 347.6 5,945.0 4,009.7

 

Required

a. Compute the accounts receivable turnover ratio and the average days to collect receivables for year three and for year two for both Mikey Inc. and Armer Inc.

 

Note: Round your answers to two decimal places.

Accounts receivable turnover Year 3 Year 2
Mikey Inc. Answer Answer
Armer Inc. Answer Answer

Average days to collect receivables Year 3 Year 2
Mikey Inc. Answer Answer
Armer Inc. Answer Answer

b. Analyze the year-to-year results for both companies.

 

Trends in Year 3 as compared to Year 2 for the Mikey Inc.indicate a

 

Answer
Indicated by the accounts receivable turnover ratio
Answer
Indicated by the average days to collect receivables

 

These results indicate the following when comparing financial conditions of Year 2 to Year 3:
Answer

 

 

Trends in Year 3 as compared to Year 2 for Armer Inc. indicate a

 

Answer
Indicated by the accounts receivable turnover ratio
Answer
Indicated by the average days to collect receivables

 

These results indicate the following when comparing financial conditions of Year 2 to Year 3:
Answer
Please answer all parts of the question.
 
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