The following information was taken from the 2009 financial statements of FedEx Corporation, a major global transportation/delivery company.
|
(in millions)
|
2009
|
2008
|
|
Accounts receivable (gross)
|
$3,587
|
4,517
|
|
Accounts receivable (net)
|
3,391
|
4,359
|
|
Allowance for doubtful accounts
|
196
|
158
|
|
Sales
|
35,497
|
37,953
|
|
Total current assets
|
7,116
|
7,244
|
Instructions
Answer each of the following questions.
(a) Calculate the receivables turnover ratio and the average collection period for 2009 for FedEx.
(b) Is accounts receivable a material component of the company"s total current assets?
(c) Evaluate the balance in FedEx"s allowance for doubtful accounts.