Presented here are the average days to collect accounts receivable for four companies in different industries. The data are for 2013.
Average Days to Collect
Company Accounts Receivable
Boeing (aircraft manufacturer) ............ 27
Colgate-Palmolive Company (consumer products manufacturer) .. 34
Ethan Allen (furniture retailer) ............... 6
General Motors (auto sales only) ............. 22
Write a brief memorandum that provides possible answers to each of the following questions:
a. Why would a company that manufactures and sells airplanes (Boeing) and a company that manufactures and sells automobiles (General Motors) collect their accounts receivables in such relatively short times?
b. Why would a company that sells furniture (Ethan Allen) collect its receivables so much quicker than a company that sells toothpaste and soap (Colgate-Palmolive)?

  • CreatedApril 20, 2015
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