Comparative Analysis Problem Name Institution Introduction Decision making is a critical element in the establishment of a successful business entity. It therefore calls for an objective careful and critical examination and the evaluation of multiple factors both financial and non-financial that affect the business operations. In regard to business decision making this paper will focus on the management of accounts receivables for VF Corporation and the Columbia Sportswear Corporation. The analysis will be founded on a critical analysis of the accounts receivables turnover as well as the average collection periods in both business entities. The paper will also after establishing the variables for each entity conduct an objective analysis to give a sound conclusion on the management of accounts receivables for both businesses. The analysis will be based on the figures reported by both companies in their annual financial and terms at VF Corporation are stricter and better implemented compared to those at Columbia. Consequently the credit collection department at VF Corporation is more proactive and aggressive than that of Columbia Sportswear Company. From the analysis it’s clear that the VF Corporation has better credit management policies compared to the Columbia Sportswear Company. This is validated by the fact that VF Corporation has higher accounts receivable turnover (9.22) and a shorter average collection period (39.59 days) (Vf Corporation 2014 Annual Report 2014) compared to Columbia Sportswear Company which has a lower accounts receivable turnover (6.45) and a longer average collection period (56.58 days). ("Columbia Sportswear Company - Annual Reports" 2014) References Vf Corporation 2014 Annual Report (2014). Retrieved February 25 2017 from content.stockpr.com Results/726/annual_report/2014.pdf Columbia Sportswear Company - Annual Reports. (2014). Investor.columbia.com. Retrieved 25 February 2017 from http://investor.columbia.com/annuals.cfm [...]
Purpose of Assignment The purpose of this assignment is to help you understand the basics of financial statement analysis using financial ratios on the assets section of the balance sheet, data interpretation, and how ratios are used to gain insight about the management of receivable. Assignment Steps Resources: Financial Accounting: Tools for Business Decision Making Develop an 875-word analysis providing conclusions concerning the management of accounts receivable based on the financial statements of Columbia Sportswear Company presented in Appendix B and the financial statements of VF Corporation presented in Appendix C, including the following: Based on the information contained in these financial statement, compute the following 2014 values for each company: Accounts receivable turnover (For VF, use "Net sales" and assume all sales were credit sales) Average collection period for accounts receivable What conclusions concerning the management of accounts receivable can be drawn from this data? Use the Week 1 Excel® spreadsheet to show your work and submit with your analysis.