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    Average collection period and AR turnover

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    McDonald (In millions of USD)

    2008 2007 2006
    Net sales $23,522.40 $ 22,786.60 $20,895.20
    Acct Recv 931.20 1,053.80 806.90

    2008
    23522.40/(1053.80+931.20)/2 = 23522.4/1985 =23.70 times or 15 days

    2007
    22786.6/(1053.80+806.9)/2= 22786.6/930.35=24.50 times or 15 days"

    now to compare it to Burger King (BKC)

    2008 2007 2006

    Net sales $2,455.00 $2,234.00 $2,048.00 (in millions)

    AR $139.00 $125.00 $110.00

    2008

    $2,455.00/ ((139 +125) / 2)= 18.60 times or 19.6 days

    2007

    2,234.00/ ((125 +109) / 2)= 19.09 times or19.1 days

    Overall Burger King's AR's turn over is not far behind McDonalds, one thing one has to consider although, is the amount of sales of McDs in comparison to BK. By net sales alone it seems that McDs sales almost ten times more than BK, and still manages to get a better turn around.
    Way to go McDs!

    What your opinion? why you think it's good choice to compare that types of company's between each other?

    Thank you.

    © BrainMass Inc. brainmass.com June 3, 2020, 10:29 pm ad1c9bdddf
    https://brainmass.com/business/accounting/average-collection-period-and-ar-turnover-234074

    Solution Preview

    McDonald (In millions of USD)

    2008 2007 2006
    Net sales $23,522.40 $ 22,786.60 $20,895.20
    Acct Recv 931.20 1,053.80 806.90

    2008
    23522.40/(1053.80+931.20)/2 = 23522.4/1985 =23.70 times or 15 days

    2007
    22786.6/(1053.80+806.9)/2= 22786.6/930.35=24.50 times or 15 days"

    now to compare it to Burger King ...

    Solution Summary

    Response compares and interprets the Average collection period and AR turnover of two companies

    $2.19

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