Packaging Corporation of America produces containerboard and white papers. WestRock Co. manufactures paper products and corrugated products. Financial statement data for these two companies follow:

Required:

1. Determine the receivables turnover ratios for both companies for 2016, 2017, and 2018.

2. Which company collected its accounts receivable more quickly in 2018?

3. How did the two companies’ accounts receivable collection change over the period presented?

4. How does the way we compute average accounts receivable—by averaging the beginning and ending balances—potentially distort the accounts receivable turnover ratio? How could this potential distortion be mitigated?

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Packaging Corporation of America ($ in millions of dollars) 2015 2016 2017 2018 Sales $5,779.0 689.2 $6,444.9 $7,014.6 Accounts receivable at December 31 $636.5 830.7 901.9 WestRock Co. ($ in millions of dollars) 2015 2016 2017 2018 Sales $14,171.8 $14,859.7 $16,285.1 Accounts receivable at December 31 $1,575.4 1,592.2 1,886.8 2,010,7