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.

Reference no: EM132234915

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