A Recent Annual Report for C Co 1 Calculate the Receivables Turnover Ratio and Average Collection Period

Essay

A recent annual report for C Co. contained the following data: $$\begin{array} { | l | r | r | } \hline & \underline { \mathbf { 2 0 1 2 } } & \underline { \mathbf { 2 0 1 1 } } \\\hline \text { Trade receivables } & \$ 1,798 & \$ 1,666 \\\hline \text { Less: Allowance for Doubtful Accounts } & 12 & 10 \\\hline \text { Net trade receivables } & 1,786 & 1,656 \\\hline \text { Net sales (assume all are on credit) } & \$ 19,805 & \\\hline\end{array}$$
1. Calculate the receivables turnover ratio and average collection period for the year:
a. Receivables turnover
b. Average collection period
2. What do these results indicate?