Presented here is basic financial information from the 2009 annual reports of Intel and Advanced Micro Devices (AMD), the two primary manufacturers of silicon chips for personal computers.
|
(in millions)
|
Intel
|
AMD
|
|
Sales
|
$35,127
|
$5,403
|
|
Allowance for doubtful accounts, Jan. 1
|
17
|
8
|
|
Allowance for doubtful accounts, Dec. 31
|
19
|
7
|
|
Accounts receivable balance (gross), Jan. 1
|
1,729
|
328
|
|
Accounts receivable balance (gross), Dec. 31
|
2,292
|
752
|
Instructions
Calculate the receivables turnover ratio and average collection period for both companies. Comment on the difference in their collection experiences.