H.J. Heinz Company was founded in 1869 at Sharpsburg, Pennsylvania, by Henry J. Heinz. The company manufactures and markets food products throughout the world, including ketchup, condiments and sauces, frozen food, pet food, soups, and tuna. For the fiscal years 2004 and 2003, H.J. Heinz reported the following (in thousands):
| |
Year Ending |
| |
April 28, 2004 |
April 30, 2003 |
|
Net sales
|
$8,414,538
|
$8,236,836
|
|
Account receivable
|
1,093,155
|
1,165,460
|
Assume that the accounts receivable (in thousands) were $1,125,200 at the beginning of the 2003 fiscal year.
a. Compute the accounts receivable turnover for 2004 and 2003. Round to one decimal place.
b. Compute the days' sales in receivables at the end of 2004 and 2003. Round to one decimal place.
c. What conclusions can be drawn from these analyses regarding Heinz's efficiency in collecting receivables?