Presented Here Is Basic Financial Information (In Millions) from the Annual

question 150

Essay

Presented here is basic financial information (in millions) from the annual reports of Nike and Adidas. Instructions
Calculate the accounts receivable turnover and average collection period for both companies. Comment on the difference in their collection experiences.

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Definitions:

Goods On Consignment

Items that are held by a seller but still owned by the supplier until sold, at which point the supplier receives payment minus a commission.

Resalable

Resalable refers to goods or products that can be sold again, either in their original condition or after being refurbished or repurposed.

Principle of Consistency

An accounting principle that necessitates the use of the same accounting methods and practices from one period to the next for comparability.

Inventory Valuation Method

A system or approach used to calculate the ending inventory's cost and determine the cost of goods sold, affecting the company's profitability and inventory balance.