Question:
Microsoft Corporation reported the following information in its financial statements for three successive
quarters during the 2011 fiscal year ($ in millions):
Required:
Compute the receivables turnover ratio and the average collection period for the second and third
quarters.
Assume that each quarter consists of 91 days.
Answer:
Second quarter:
Receivables turnover = $19,953 = 1.772 times
$11,260
Average collection = 91 = 51.35 days
period 1.772
Third quarter:
Receivables turnover = $16,428 = 1.43 times
$11,453.5
Microsoft Corporation reported the following information in its financial statements for three successive
quarters during the 2011 fiscal year ($ in millions):
Required:
Compute the receivables turnover ratio and the average collection period for the second and third
quarters.
Assume that each quarter consists of 91 days.
Answer:
Second quarter:
Receivables turnover = $19,953 = 1.772 times
$11,260
Average collection = 91 = 51.35 days
period 1.772
Third quarter:
Receivables turnover = $16,428 = 1.43 times
$11,453.5
