Problem:
Suppose the following information was taken from the 2014 financial statements of FedEx Corporation, a major global transportation / delivery company.
|
(in millions)
|
2014
|
2013
|
|
Accounts receivable (gross)
|
$ 3,587
|
$ 4,517
|
|
Accounts receivable (net)
|
3,391
|
4,359
|
|
Allowance for doubtful accounts
|
196
|
158
|
|
Sales revenue
|
35,497
|
37,953
|
|
Total current assets
|
7,116
|
7,244
|
Required:
Please answer the following question:
- Calculate the accounts receivable turnover and the average collection period for 2014 for FedEx.
-
Is accounts receivable a material component of the company's total current assets?
-
Evaluate the balance in FedEx's allowance for doubtful accounts.
Note: Be sure to show how you arrived at your answer.