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# Average collection period and AR turnover

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.

#### 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