Suppose the amounts presented here are basic financial information (in millions) from the 2020 annual reports of Nike and adidas. Nike adidas Sales revenue $23,825.5 $13,056 Allowance for doubtful accounts, beginning 76.8 100 Allowance for doubtful accounts, ending 114.7 140 Accounts receivable balance (gross), beginning 2,884.3 1,754 Accounts receivable balance (gross), ending 2,913.2 1,558
Suppose the amounts presented here are basic financial information (in millions) from the 2020 annual reports of Nike and adidas. Nike adidas Sales revenue $23,825.5 $13,056 Allowance for doubtful accounts, beginning 76.8 100 Allowance for doubtful accounts, ending 114.7 140 Accounts receivable balance (gross), beginning 2,884.3 1,754 Accounts receivable balance (gross), ending 2,913.2 1,558
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Suppose the amounts presented here are basic financial information (in millions) from the 2020 annual reports of Nike and adidas.
|
Nike
|
adidas
|
|||
| Sales revenue | $23,825.5 | $13,056 | ||
| Allowance for doubtful accounts, beginning | 76.8 | 100 | ||
| Allowance for doubtful accounts, ending | 114.7 | 140 | ||
| 2,884.3 | 1,754 | |||
| Accounts receivable balance (gross), ending | 2,913.2 | 1,558 |
![### Financial Information Analysis
#### Overview
Suppose the amounts presented here are basic financial information (in millions) from the 2020 annual reports of Nike and adidas.
#### Financial Data Table
| Category | Nike | adidas |
|-----------------------------------------------|------------|-----------|
| **Sales revenue** | $23,825.5 | $13,056 |
| **Allowance for doubtful accounts, beginning**| 76.8 | 100 |
| **Allowance for doubtful accounts, ending** | 114.7 | 140 |
| **Accounts receivable balance (gross), beginning** | 2,884.3 | 1,754 |
| **Accounts receivable balance (gross), ending** | 2,913.2 | 1,558 |
#### Task (a1)
**Calculate the accounts receivable turnover for both companies.**
*(Round answers to 1 decimal place, e.g., 12.5)*
| Company | Accounts receivable turnover |
|---------|------------------------------|
| **Nike** | _ times |
| **adidas**| _ times |
To calculate the accounts receivable turnover, use the following formula:
\[ \text{Accounts receivable turnover} = \frac{\text{Sales Revenue}}{\text{Average Accounts Receivable Balance (Gross)}} \]
Where the **Average Accounts Receivable Balance (Gross)** is calculated as:
\[ \text{Average Accounts Receivable Balance (Gross)} = \frac{\text{Beginning Accounts Receivable Balance (Gross)} + \text{Ending Accounts Receivable Balance (Gross)}}{2} \]
Using the provided data, calculate this for both Nike and adidas:
**For Nike:**
1. Calculate the average accounts receivable balance (gross):
\[
\text{Average } = \frac{2,884.3 + 2,913.2}{2}
\]
2. Calculate the accounts receivable turnover:
\[
\text{Turnover} = \frac{23,825.5}{\text{Average accounts receivable balance}}
\]
**For adidas:**
1. Calculate the average accounts receivable balance (gross):
\[
\text{Average } = \frac{1,754 + 1,558}{2}
\]
2. Calculate the accounts receivable turnover:
\[
\text{Turn](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1e7713e5-bc5d-45b6-9158-f2a077b22183%2F0891dc80-1672-48e6-b48b-3e3474cae4af%2Fotfm13_processed.png&w=3840&q=75)
Transcribed Image Text:### Financial Information Analysis
#### Overview
Suppose the amounts presented here are basic financial information (in millions) from the 2020 annual reports of Nike and adidas.
#### Financial Data Table
| Category | Nike | adidas |
|-----------------------------------------------|------------|-----------|
| **Sales revenue** | $23,825.5 | $13,056 |
| **Allowance for doubtful accounts, beginning**| 76.8 | 100 |
| **Allowance for doubtful accounts, ending** | 114.7 | 140 |
| **Accounts receivable balance (gross), beginning** | 2,884.3 | 1,754 |
| **Accounts receivable balance (gross), ending** | 2,913.2 | 1,558 |
#### Task (a1)
**Calculate the accounts receivable turnover for both companies.**
*(Round answers to 1 decimal place, e.g., 12.5)*
| Company | Accounts receivable turnover |
|---------|------------------------------|
| **Nike** | _ times |
| **adidas**| _ times |
To calculate the accounts receivable turnover, use the following formula:
\[ \text{Accounts receivable turnover} = \frac{\text{Sales Revenue}}{\text{Average Accounts Receivable Balance (Gross)}} \]
Where the **Average Accounts Receivable Balance (Gross)** is calculated as:
\[ \text{Average Accounts Receivable Balance (Gross)} = \frac{\text{Beginning Accounts Receivable Balance (Gross)} + \text{Ending Accounts Receivable Balance (Gross)}}{2} \]
Using the provided data, calculate this for both Nike and adidas:
**For Nike:**
1. Calculate the average accounts receivable balance (gross):
\[
\text{Average } = \frac{2,884.3 + 2,913.2}{2}
\]
2. Calculate the accounts receivable turnover:
\[
\text{Turnover} = \frac{23,825.5}{\text{Average accounts receivable balance}}
\]
**For adidas:**
1. Calculate the average accounts receivable balance (gross):
\[
\text{Average } = \frac{1,754 + 1,558}{2}
\]
2. Calculate the accounts receivable turnover:
\[
\text{Turn
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