Question: Nestls fi nancial statements are presented in Appendix B. Financial statements of Delfi Limited are presented in Appendix C. Instructions a. Based on the information

Nestlé’s fi nancial statements are presented in Appendix B. Financial statements of Delfi Limited are presented in Appendix C.

Instructions

a. Based on the information in these financial statements, compute the following ratios for each company for the most recent fiscal year shown. (Assume all sales are credit sales and that all receivables are trade receivables.)

1. Accounts receivable turnover.

2. Average collection period for receivables.

b. What conclusions about managing accounts receivable can you draw from these data?

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