Please help me reply to these two posts:

Post 1

The Coca-Cola accounts receivable turnover ratio for 2020 is 5.5. I found this by taking the Gross profit (in millions) of $19,581 and dividing it by the average net accounts receivable (in millions) which was $3,144+$3,971/2.

$19,581/ ($3,144+$3,971/2)= 5.5

The Walmart accounts receivable turnover ratio for 2020 is 87.4. I found this by taking the total revenues (in millions) of $559,151 and dividing it by the average net accounts receivable (in millions) which was $6,516+$6,284/2.

$559,151/ ($6,516+$6,284/2)=87.4

The difference in these two companies is huge. Having a high accounts receivable turnover ratio means that the company is in a good financial position and is collecting its debts efficiently. Walmart is the largest retailer in the world, so this turnover ratio makes sense to me. At first, I was confused at the difference but for a company as profitable as Walmart, this is reasonable. Coca Cola's turnover ratio is lower than expected. I assumed they would be in the mid to low 20s just out of pure "assumption" that the company was doing well financially. These companies might sell their receivables to ensure it collects on its debts in some way. By selling their receivables, they are making their money back and will in turn be in better financial standings.

I struggled with this DB post. All the companies seem to use different terminologies on their financial reports. I am not sure I used the correct information. If anyone has any tips or feedback, that would be appreciated!

Post2

Hello class,

Below are my calculations for the accounts receivable turnover for The Coca-Cola Company and Wal-Mart Inc. year end 2020. All numbers used were found in my links for the annual reports of the respective company. The formula used was found in chapter 9 of our reading.

net credit sales/average net accounts receivable= account receivable turnover.

A "reasonable" turnover ratio would be at least 1.0 times a year to ensure the company is collecting its accounts receivable. However, higher turnover ratios are favored by companies as this would give them the cash needed for growth of their operations and accounts in good standings. A high turnover ratio shows that the company can effectively manage and monitor its collection process.

A couple of reasons companies may want to sell their receivables would be to improve cash flow issues and gain access to working capital without creating debt.

Please review my calculations and give me any feedback you can, thank you!

Weygandt, J. J., Kimmel, P. D., & Mitchell, J. E. (2020).Accounting Principles(14th ed.). Wiley Global Education US.

https://purdueuniversityglobal.vitalsource.com/books/9781119707080

The Coca-Cola Company

https://investors.coca-colacompany.com/filings-reports/annual-filings-10-k?form_type=&year=2020

Wal-Mart Inc.

https://s201.q4cdn.com/262069030/files/doc_financials/2020/ar/Walmart_2020_Annual_Report.pdf