AutoZone, Inc. claims to be the nations leading auto parts retailer. It sells replacement auto parts directly

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AutoZone, Inc. claims to be the nation’s leading auto parts retailer. It sells replacement auto parts directly to the consumer. BorgWarner, Inc. has over 30,000 employees and produces automobile parts, such as transmissions and cooling systems, for the world’s vehicle manufacturers. The following data were taken from these companies’ 2018 and 2017 annual reports. All dollar amounts are in thousands.

Fiscal Years Ending AutoZone BorgWarner December 31, 2017 August 25, 2018 Sales $11,221,077 $9,799,300 Accounts receivable 256,136 1,735,700


Required

a. Before performing any calculations, speculate as to which company will take the longest to collect its accounts receivable. Explain the rationale for your decision.

b. Calculate the accounts receivable turnover ratios for AutoZone and BorgWarner.

c. Calculate the average days to collect accounts receivable for AutoZone and BorgWarner.

d. Do the calculations from Requirements b and c confirm your speculations in Requirement a?

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Related Book For  book-img-for-question

Introductory Financial Accounting For Business

ISBN: 9781260575309

2nd Edition

Authors: Thomas Edmonds, Christopher Edmonds, Mark Edmonds, Jennifer Edmonds, Philip Olds

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