Aer Lingus provides passenger and cargo transportation

services from Ireland #958

Aer Lingus provides passenger and cargo transportation services from Ireland to markets in the
United Kingdom, continental Europe, and the United States. It uses the euro as the monetary
unit for financial reporting purposes. WestJet Airlines is a Canadian airline that serves more
than 65 destinations, mainly in Canada but also in the United States, the Caribbean, and
Mexico. The net sales and average balances of trade receivables for Aer Lingus and WestJet
Airlines for a recent fiscal year are shown below:Required:1. Compute the following for each
company for 2012: a. The receivables turnover ratio. b. The average collection period. 2. Based
on your computations for (1), which company’s trade receivables appear to be the more “
liquid” asset? Explain. 3. The companies use different currencies to prepare their financial
statements. Does the use of different currencies affect the interpretation of the receivables
turnover ratio and the average collection period? Explain.View Solution:
Aer Lingus provides passenger and cargo transportation services from Ireland

ANSWER
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