### Determine the receivables turnover ratio

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##### Reference no: EM132234915

Question - The Second Cup is a Canadian specialty coffee retailer with over 350 cafes that serve the needs of thousands of guests daily. Its annual reports include the following details (in thousands of Canadian dollars):

 Year 2015 2014 2013 2012 2011 2010 Net sales \$37,341 \$28,172 \$27,188 \$26,346 \$25,001 \$25,171 Accounts receivable 5,168 5,115 5,031 4,839 5,449 5,917 Allowance for doubtful accounts 1,734 1,089 633 223 111 74

Required -

1. Determine the receivables turnover ratio and average collection period for 2011-2015, and comment on the results.

2. Explain the meaning of the numbers that you calculated in requirement (1).

3. Compute the ratio of allowance for doubtful accounts to accounts receivable for each of the six years, and comment on the results.

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