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Recent financial statements of General Mills, Inc. report net sales of $12,442,000,000. Accounts receivable are $912,000,000 at the beginning of the year and $953,000,000 at the end of the year. Compute General Mills' accounts receivable turnover. (Round answer to 2 decimal places, e.g. 15.25.) Accounts receivable turnover times LINK TO TEXT Compute General Mills' average collection period for accounts receivable in days. (Round answer to 2 decimal places, e.g 15.25.)

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Answer:

General Mills' accounts receivable turnover: 13.34 times

General Mills' average collection period for accounts receivable in days: 27.36 days

Explanation:

The accounts receivable turnover is an efficiency ratio that measures how many times a company can collect its receivables or money owed by clients during the year.

Accounts receivable turnover is calculated by following formula:

Accounts Receivable Turnover = Net Credit Sales /Average Accounts Receivable

In there:

Average Accounts Receivable = (The beginning accounts receivable of the year balance + The ending accounts receivable of the year balance)/2

In General Mills, Inc.:

Average Accounts Receivable = ($912,000,000 + $953,000,000)/2 = $932,500,000

General Mills' accounts receivable turnover = $12,442,000,000/$932,500,000 = 13.34 times

General Mills' average collection period for accounts receivable in days = 365/Accounts receivable turnover = 365/13.34 = 27.36 days

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