RONA inc. is a leading Canadian retailer and distributor of hardware, home renovation, and garden products, operating out of more than 680 franchised, affiliated, and corporate stores. For two recent years, RONA reported the following (in millions):
The accounts receivable (in millions) were $251 at the beginning of the year ended December 26, 2010.
1. Compute the accounts receivable turnover for 2011 and 2010. Round to one decimal place.
2. Compute the days’ sales in receivables at the end of 2011 and 2010. Round to one decimal place.
3. What conclusions can be drawn from 1. and 2. regarding RONA’s efficiency in collecting receivables?
4. For its years ended in 2011 and 2010, Canadian Tire Corporation, Limited has an accounts receivable turnover of 14.0 and 12.1, respectively. Compare RONA’s efficiency in collecting receivables with that of Canadian Tire.

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