Calculate accounts receivable turnover ratio for microsoft

Reference no: EM13901605

CALCULATING AND INTERPRETING ACCOUNTS RECEIVABLE TURNOVER RATIOS. Microsoft Corporation (Microsoft) and Oracle Corporation (Oracle) engage in the design, manufacture, and sale of computer software. Microsoft sells and licenses a wide range of systems and application software to businesses, computer hardware manufacturers, and consumer retailers. Oracle sells software for information management almost exclusively to businesses. Exhibit 4.22 presents selected data for the two firms for 2006-2008.

Required

a. Calculate the accounts receivable turnover ratio for Microsoft and Oracle for 2006, 2007, and 2008.

b. Suggest possible reasons for the differences in the accounts receivable turnovers of Microsoft and Oracle during the three-year period.

c. Suggest possible reasons for the changes in the accounts receivable turnover for the two firms over the three-year period.

Exhibit 4.21 Selected Data for Three Retailers (amount in millions)
	Macy's	Home Depot	Supervalu
Sales	$24,892	$71,288	$44,564
Cost of Goods Sold	15,009	47,298	34,451
Interest Expense	588	624	633
Net Income	(4,803)	2,260	(2,855)
Average Inventory	4,915	11,202	2,743
Average Fixed Assets	10,717	26,855	7,531
Average Total Assets	24,967	42,744	19,333

Exhibit 4.22 Selected Data for Microsoft and Oracle (amount in millions)
	2008	2007	2006
Microsoft
Sales	$58,437	$60,420	$51,122
Average Accounts Receivable	12,391	12,464	10,327
Change in Sales from Previous Year	-3.3%	+18.2%	+15.5%
Oracle
Sales	$23,252	$22,430	$17,996
Average Accounts Receivable	4,430	5,799	4,589
Change in Sales from Previous Year	+3.7%	+24.6%	+25.2%

Reference no: EM13901605

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