Ralph Lauren Corporation designs, markets, and distributes a variety of apparel, home decor, accessory, and fragrance products. The company's products include such brands as Polo by Ralph Lauren, Ralph Lauren Purple Label, Ralph Lauren, Polo Jeans Co., and Chaps. Polo Ralph Lauren reported the following (in thousands) for two recent years:

Assume that accounts receivable (in millions) were $607,000 at the beginning of Year 1.
a. Compute the accounts receivable turnover for Year 2 and Year 1. Round to two decimal places.
b. Compute the days' sales in receivables for Year 2 and Year 1. Use 365 days and round to one decimal place.
c. What conclusions can be drawn from these analyses regarding Ralph Lauren's efficiency in collecting receivables?

Transcribed Image Text:

For the Period Ending Year 2 Year 1 Sales Accounts receivable $7,620,000 $7,450,000 857,000 800,000