According to its 2013 annual report, RONA Inc. is the largest Canadian distributor and retailer of hardware, home renovation, and gardening products. RONA’s 2013 financial statements contained the following information, in thousands of Canadian dollars:
a. What percentages of RONA Inc.’s accounts receivable were considered uncollectible in each of 2013 and 2012? Is the trend favourable or unfavourable?
b. Calculate RONA’s accounts receivable turnover rates for 2013 and 2012 using the ending balances of the receivables for each year rather than the average receivables. Is the trend favourable or unfavourable?
c. What was the average number of days taken by RONA to collect its accounts receivable in 2013? In 2012? Do these figures provide insights beyond what the results in part “b” showed? Explain.

  • CreatedJune 11, 2015
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