Reference no: EM132681466
Problem - Accounts receivable turnover and days' sales in receivables
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 Ralph Lauren, Ralph Lauren Purple Label, Ralph Lauren, Ralph Lauren Polo Jeans Co., and Chaps. Polo Ralph Lauren reported the following (in thousands):
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For the Period Ending
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March 29, 2009
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March 29, 2008
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Net Sales
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$5,018,900
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$4,880,100
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Accounts receivable
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576,700
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585,000
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Assume that accounts receivable (in millions) were $511,900 at the beginning of the 2008 fiscal year.
Required -
a. Compute the accounts receivable turnover for 2009 and 2008. Round to one decimal place.
b. Compute the days' sales in receivables for 2009 and 2008. Round to one decimal place.
c. What conclusions can be drawn from these analyses regarding Ralph Lauren's efficiency in collecting receivables?