Apple Inc. designs, manufactures, and markets personal computers and related personal computing and communicating solutions for sale primarily to education, creative, consumer, and business customers. Substantially all of the company's sales over the last five years are from sales of its Macs, iPods, iPads, and related software and peripherals. For two recent fiscal years, Apple reported the following (in millions):
________________________________ Year 2 ____________ Year 1
Sales ......................................... $233,715 .............. $182,795
Accounts receivable at end of year ..... 35,889 ................... 31,537
Assume that the accounts receivable (in millions) were $24,094 at the beginning of fiscal Year 1.
1. Compute the accounts receivable turnover for Year 2 and Year 1. Round to two decimal places.
2. Compute the days' sales in receivables at the end of Year 2 and Year 1. Use 365 days and round to one decimal place.
3. What conclusions can be drawn from (1) and (2) regarding Apple's efficiency in collecting receivables?