14th Edition

ISBN: 9781305088436

Author: Carl Warren, Jim Reeve, Jonathan Duchac

Publisher: Cengage Learning

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Textbook Question

Chapter 9, Problem 26E

Polo Ralph Lauren Corporation designs, markets, and distributes a variety of apparel, home decor, accessory, and fragrance products. The company’s products include such brands as Polo by Ralph Lauren, Ralph Lauren Purple Label, Ralph Lauren, Polo Jeans Co., and Chaps. Polo Ralph Lauren reported the following (in thousands) for two recent years:

Chapter 9, Problem 26E, Polo Ralph Lauren Corporation designs, markets, and distributes a variety of apparel, home decor,

Assume that accounts receivable (in millions) were $486,200 at the beginning of Year 1.

a. Compute the accounts receivable turnover for Year 2 and Year 1. Round to one decimal place.
b. Compute the days’ sales in receivables for Year 2 and Year 1. Use 365 days and round to one decimal place.
c. What conclusions can be drawn from these analyses regarding Ralph Lauren’s efficiency in collecting receivables?

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Chapter 9, Problem 25E

Chapter 9, Problem 27E

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Solution Summary: The author calculates the accounts receivable turnover ratio for Year 2 and Year 1.

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