The 2017 Annual Report of Ski Products,Inc

question 114

Essay

The 2017 annual report of Ski Products,Inc.reported the following amounts (in millions of dollars):
Required
1.Compute Ski's accounts receivable turnover ratio for the year ended May 31,2017.(Assume that all sales are on credit. )
2.What is the average collection period in days for an account receivable? Explain your answer.
3.Ski's main products are medium to high-end skis and snow boards.Give some examples of the types of customers you would expect Ski to have.Do you think the average collection period for sales to these customers is reasonable? What other information do you need to fully answer that question?
$\begin{array}{llr} \text { Net sales, for the year ended May 31,2017 } &\$15,111.2\\ \text { Receivables, May 31, 2017 } &989.4\\ \text {Receivables, May 31, 2016 } &1,011.6\end{array}$

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Definitions:

Hazardous Materials

Substances that pose risks to public health, safety, or the environment if not properly controlled or contained.

Contingent Liabilities

Potential obligations that may occur depending on the outcome of a future event.

Environmental Protection Agency

A federal agency charged with protecting human health and the environment by writing and enforcing regulations based on laws passed by Congress.

Product Warranty

A promise or assurance given by a manufacturer or seller to a buyer that a product is free from defects and will perform as specified for a certain period of time.