WestJet Airlines Ltd. pioneered low-cost flying in Canada, offering service throughout its 71-city North American and Caribbean network. WestJet reported the following (in millions of dollars):
The accounts receivable (in millions) were $17 at the beginning of the year ended December 31, 2009.
a. Compute the accounts receivable turnover for 2010 and 2009. Round to one decimal place.
b. Compute the days’ sales in receivables for 2010 and 2009. Round to one decimal place.
c. Do the ratios indicate an improvement or a decline in WestJet Airlines Ltd.’s ability to manage accounts receivable?
d. Assuming an industry average accounts receivable turnover of 21.0 times, is WestJet Airlines Ltd. more or less efficient than other companies in the industry?

  • CreatedSeptember 15, 2015
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