Apple Computer Inc. is best known for its iMac, iPod, iPad, and iPhone product lines. Three recent years produced a combination of dramatic increases in sales revenue and net earnings. Cash flows from operations also increased during the period. Contributing to that increasing cash flow was the change in trade receivables. The current- and prior- year statements of financial position reported the following (in millions of U. S. dollars):

Required:
1. How would the change in trade receivables affect cash flow from operations for the current year? Explain why it would have this effect.
2. Explain how increasing sales revenue often leads to (a) increasing trade receivables and (b) an excess of sales revenue over collections from customers.
3. The company reported $ 108,249 million in net sales for the current year. Compute the receivables turnover ratio and the average collection period for the current year. Are the computed numbers useful to an investor? Explain.

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Current Year $5,369 Previous Year $5,910 Trade receivables, lees allowance for doubtful accounts