Earthlink, Inc., is a nationwide Internet Service Provider (ISP). Earthlink provides a variety of services to its
Question:
Assume that the accounts receivable (in thousands) were $59,211 at January 1, 2001.
1. Compute the accounts receivable turnover for 2002 and 2001. Round to one decimal place.
2. Compute the days' sales in receivables at the end of 2002 and 2001.
3. What conclusions can be drawn from (1) and (2) regarding Earthlink's efficiency in collecting receivables?
4. Given the nature of Earthlink's operations, do you believe Earthlink's accounts receivable turnover ratio would be higher or lower than a typical manufacturing company, such as Boeing or Kellogg?Explain.
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Related Book For
Accounting
ISBN: 978-0324188004
21st Edition
Authors: Carl s. warren, James m. reeve, Philip e. fess
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