Purpose: To help you understand and compare the performance of two companies in the same industry.
Find the Bombardier Annual Report, Year Ended January 31, 2011 located in MyAccountingLab. Now access the Boeing Company’s 2010 Annual Report. To do this from the internet, go to their webpage for the Investor Relations at http://www.boeing.com/companyoffices/financial/quarterly.htm and under Annual Report, go to the 2010 Annual Report.
Calculate the accounts receivable turnover for Bombardier for 2011 and Boeing for 2010 using the gross trade receivable amounts for each company. Who has the highest accounts receivable turnover? Is that good or bad? Is it better to have a high accounts receivable turnover or a low accounts receivable turnover? Explain your answer.