The asset side of the 2016 balance sheet for Leggett & Platt (a furniture manufacturer) follows. The company reported net sales of $3,749.9 million in 2016 and $3,917.2 million in 2015. Use this information to answer the requirements:
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Required:
a. Compute the accounts receivable turnover for 2016 and 2015. At December 31, 2014, accounts and other receivables, net were $523.3 million.
b. Compute the days sales outstanding (DSO) for each year.
c. Does the number of days to collect receivables seem appropriate for Leggett & Platt?
d. How could Leggett & Platt improve its accounts receivable turnover?

Question

The asset side of the 2016 balance sheet for Leggett & Platt (a furniture manufacturer) follows. The company reported net sales of $3,749.9 million in 2016 and $3,917.2 million in 2015. Use this information to answer the requirements:
  Table continued next page
Table continued
  Required: 
a. Compute the accounts receivable turnover for 2016 and 2015. At December 31, 2014, accounts and other receivables, net were $523.3 million.
b. Compute the days sales outstanding (DSO) for each year.
c. Does the number of days to collect receivables seem appropriate for Leggett & Platt?
d. How could Leggett & Platt improve its accounts receivable turnover?

Quizplus · Accepted Answer

The Answer of The asset side of the 2016 balance sheet for Leggett & Platt (a furniture manufacturer) follows. The company reported net sales of $3,749.9 million in 2016 and $3,917.2 million in 2015. Use this information to answer the requirements:
  Table continued next page
Table continued
  Required: 
a. Compute the accounts receivable turnover for 2016 and 2015. At December 31, 2014, accounts and other receivables, net were $523.3 million.
b. Compute the days sales outstanding (DSO) for each year.
c. Does the number of days to collect receivables seem appropriate for Leggett & Platt?
d. How could Leggett & Platt improve its accounts receivable turnover?

The Asset Side of the 2016 Balance Sheet for Leggett