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197
MBA 6–7, Concluded
6. HP’s accounts receivable turnover in Year 2 of 6.3 has increased slightly from
MBA 6–8
The results of MBA 6–6 and MBA 6–7 for Apple and HP are summarized below.
Apple HP
Year 2 Year 1 Year 2 Year 1
198
MBA 6–9
1. Year 2 Year 1
Accounts receivable turnover:
4. Days’ sales in inventory:
Alternative computations (small differences may be caused by rounding):
5. Return on sales
6. CVS’s accounts receivable turnover in Year 2 of 13.7 has decreased from 15.1
199
MBA 6–10
1. International
Paper Wal-Mart
Accounts receivable turnover:
4. Days’ sales in inventory:
MBA 6–10, Concluded
International
Paper Wal-Mart
5. Return on sales
201
CASES
Case 6–1
By computing interest using a 365-day year for depository accounts (payables),
Case 6–2
Because of the size and number of customers’ accounts, it is probably unreason-
able for Northern Construction Supplies Co. not to allow credit to contractors and
202
Case 6–2, Concluded
Note: Statement of activity indicates most contractors pay their receivables, but
they just take their time.
Case 6–3
Since the title to merchandise shipped FOB shipping point passes to the buyer
203
Case 6–4
In developing a response to Evan’s concerns, you should probably first emphas-
ize the practical need for an assumption concerning the flow of cost of goods
