Hello, I need help with a short paragraph explaining ACCOUNTS RECEIVABLES for Fo

Question

Hello, I need help with a short paragraph explaining ACCOUNTS RECEIVABLES for Ford Motor Company--using proper and relevant accounting Terminology. Thank you.

I have added the SEC link below: I am using for Ford's financial information from the SEC.

https://www.sec.gov/Archives/edgar/data/37996/000003799617000013/f1231201610-k.htm#s95C734DA3EDE827D8671D72DAABFA7C3

**Hello, The "data" you are asking for is listed under "FS-2" at the above SEC link: I need a paragraph that speaks about the data using "Accounting Terms." Thank you kindly.

Explanation / Answer

Accounts Receivable are created when a customer has received a product but has not yet paid for that product. Ford Motor Co's accounts receivables for the quarter that ended in Sep. 2017 was $10,277 Mil.

Accounts receivable can be measured by Days Sales Outstanding. Ford Motor Co's Days Sales Outstanding for the quarter that ended in Sep. 2017 was 25.73.

Net receivables tells us a great deal about the different competitors in the same industry. In competitive industries, some attempt to gain advantage by offering better credit terms, causing increase in sales and receivables.

If company consistently shows lower % Net receivables to gross sales than competitors, then it usually has some kind of competitive advantage which requires further digging.

Average Days Sales Outstanding is a good indicator for measuring a company's sales channel and customers. A company may book great revenue and earnings growth but never receive payment from their customers. This may force a write-off in the future and depress future earnings.

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