Question: Presented here is selected information for Nike, Inc. (in U.S. $ millions) and Adidas AG (in euro millions): __________________________________________________ Nike _ Adidas Net sales .............................................................................

Presented here is selected information for Nike, Inc. (in U.S. $ millions) and Adidas AG (in euro millions):

____________________________________________________________ Nike ___________ Adidas

Net sales ............................................................................. $ 24,128 ..............€13,344

Allowance for doubtful accounts, beginning of year ............. 74 ................... 127

Allowance for doubtful accounts, end of year ..................... 50 ...................... 151

Accounts receivable (gross), beginning of year ...................3,212 ................. 1,794

Accounts receivable (gross), end of year ...........................3,330 ................... 1,858

Instructions

(a) Calculate the receivables turnover and average collection period for both companies. The industry average for the receivables turnover was 7.5 times and the average collection period was 49 days.

(b) Comment on the difference in the two companies' collection experiences, and that of their industry counterparts.

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