Costco Wholesale Corporation operates membership warehouses that sell a variety of branded and private label products. Headquartered
Question:
Costco Wholesale Corporation operates membership warehouses that sell a variety of branded and private label products. Headquartered in Issaquah, Washington, it also sells merchandise online in the United States (Costco.com) and in Canada (Costco.ca). For two recent years, Costco reported the following (in millions):
Assume that the accounts receivable (in thousands) were $1,009 at the beginning of Year 1.
1. Compute the accounts receivable turnover for Year 2 and Year 1. Round to one decimal place.
2. Compute the days’ sales in receivables at the end of Year 2 and Year 1. Round to one decimal place.
3. What conclusions can be drawn from (1) and (2) regarding Costco’s efficiency in collecting receivables?
4. Given the nature of Costco’s operations, do you believe Costco’s accounts receivable turnover ratio would be higher or lower than a typical manufacturing company, such as H.J. Heinz Company?Explain.
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Step by Step Answer:
Corporate Financial Accounting
ISBN: 978-1133952411
12th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan E. Duchac