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Apple Computer Inc. is best known for its iMac, iPod, iPad, and iPhone product lines. Three
recent years produced a combination of dramatic increases in sales revenue and net earnings.
Cash flows from operations also increased during the period. Contributing to that increasing
cash flow was the change in trade receivables. The current- and prior- year statements of
financial position reported the following (in millions of U. S. dollars):Required:1. How would the
change in trade receivables affect cash flow from operations for the current year? Explain why it
would have this effect. 2. Explain how increasing sales revenue often leads to (a) increasing
trade receivables and (b) an excess of sales revenue over collections from customers. 3. The
company reported $ 108,249 million in net sales for the current year. Compute the receivables
turnover ratio and the average collection period for the current year. Are the computed numbers
useful to an investor? Explain.View Solution:
Apple Computer Inc is best known for its iMac iPod
ANSWER
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