Comparative Analysis Problem
Purpose of Assignment
The purpose of this assignment is to help you understand the basics of financial statement analysis using financial ratios on the assets section of the balance sheet, data interpretation, and how ratios are used to gain insight about the management of receivables.
Resources: Financial Accounting: Tools for Business Decision Making
Develop a 450-word paper providing conclusions concerning the management of accounts receivable based on the financial statements of Columbia Sportswear Company presented in Appendix B and the financial statements of VF Corporation presented in Appendix C, including the following:
- Based on the information contained in these financial statements, compute the following 2014 values for each company:
- Accounts receivable turnover (For VF, use “Net sales” and assume all sales were credit sales)
- Average collection period for accounts receivable
- What conclusions concerning the management of accounts receivable can be drawn from this data?
You may want to go to the company’s website (link shown in appendix) for information about the company and open or download the company’s annual report (look for the 2014 annual report).
Use the Week 1 Excel spreadsheet template to show your work and submit with your paper.
Write your paper using APA guidelines (at least cite the textbook). Your paper should have introduction, middle, conclusion. Assume the reader (instructor) does not know anything about accounts receivable and ratios, and your paper will show your knowledge about accounts receivable and the ratio results for the two companies.
Click the Assignment Files tab to submit BOTH (1) Paper (2) Excel spreadsheet.