The receivables turnover, collection period, and operating cycle for Reitmans (Canada) Limited were calculated in this chapter,

Question:

The receivables turnover, collection period, and operating cycle for Reitmans (Canada) Limited were calculated in this chapter, based on the company's financial statements for the 2012 fiscal year. These financial statements are presented in Appendix A.

Instructions

(a) Calculate Reitmans' receivables turnover, collection period, and operating cycle for the 2011 fiscal year.

(b) Comment on any significant differences you observe between the ratios for 2012 (as calculated in the chapter) and 2011 (as calculated by you above).

(c) As noted earlier in the chapter, Reitmans' accounts receivable are from customers using credit cards such as MasterCard or Visa where the sales haven't been collected in cash from the credit card company prior to the year end. Are Reitmans' receivables turnover and collection period for 2012 and 2011 consistent with this information? Explain.

(d) Given that Reitmans' accounts receivable are from customers using credit cards such as MasterCard or Visa, is Reitmans at risk of having significant uncollectible accounts receivable? Explain.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...