Objective: Analyze Levi Strauss & Co’s most recent Annual Report/10-K for Fiscal year ended November 29, 2020, to draw conclusions about the quality of Accounts Receivable, Inventory and PP&E using...

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Objective:

Analyze Levi Strauss & Co’s most recent Annual Report/10-K for Fiscal year ended November 29, 2020, to draw conclusions about the quality of Accounts Receivable, Inventory and PP&E using the company’s most recent financial statements. Show all of your calculations




I. Analyze Accounts Receivable (35 points)



1.
Find the footnote that breaks down A/Receivable and complete the following table for the past 2 years:




2020




2019























Gross Accounts Receivable





$782,846



Less: Allowance for Doubtful Accounts





$16,209



Net Accounts Receivable












2.
Over the last 2 years, what percentage of Gross Accounts Receivable does the Allowance for Doubtful Accounts represent?





3.
Compute the following for the most recent 2 fiscal years:


a. Accounts Receivable Turnover


b. Days sales outstanding





4.
What general conclusions can you draw about the quality of Accounts Receivable based on your above computations?






II. Inventory (36 points)


1. Which inventory method does the company use?




2. Compute the following for the most recent 2 fiscal years:




a. Inventory Turnover


b. Average Inventory Days Outstanding


c. Days Payable Outstanding


d. Cash Conversion Cycle




3. Comment on the company’s inventory quality and operating cycle efficiency.




III. PP&E (29 points)


1. What depreciation method is used?


2. Complete the following table:






20




20























Property, Plant & Equipment







Less: Accumulated Depreciation







Net PP&E









3. Calculate the following for the most recent 2 fiscal years:


a. PP&E Turnover


b. Percent Used Up




4. Comment on the company’s capital intensiveness & the age of the company’s PP&E assets.






Note: Assignment should be professionally prepared and well-written with no spelling/grammatical errors. Points will be deducted for unprofessional submissions.

Answered Same DayApr 30, 2021

Answer To: Objective: Analyze Levi Strauss & Co’s most recent Annual Report/10-K for Fiscal year ended November...

Khushboo answered on May 01 2021
139 Votes
Solution 1:
Breakdown of A/R:
    Particulars
    2020
    2019
    Gross Accounts Receivable
     5,54,915
     7,89,018
    Less: Allowance for Doubtful Accounts
     14,688
     6,172
    Net Accounts Receivables
     5,40,227
     7,82,846
Allowance as a % of gross receivables:
    Particulars
    2020
    2019
    Gross Accounts Receivable
     5,54,915
     7,89,018
    Allowance for Doubtful Accounts
     14,688
     6,172
    Allowance as a % of gross receivables
    2.65%
    0.78%
Calculation of ratios:
    Particulars
    2020
    2019
    Opening accounts receivables
     7,82,846
     5,34,164
    Closing accounts receivables
     5,40,227
     7,82,846
    Average accounts receivables
     6,61,537
     6,58,505
     
     
     
    Net sales
     44,52,609
     57,63,087
    Accounts receivable turnover
(Average A/R/ Net sales) (4452609/ 661537)
(5763087/ 658505)
     6.73
     8.75
     
     
     
    Days sales o/s (365/ Accounts receivable turnover ratio)
(365/6.73) (365/8.75)
     54 days
     42 days
General conclusion about A/R:
The position of Accounts receivable is good at company level because the allowances are only 2.65% which shows that the company is realising its receivables more than 97%. However, the position of accounts receivables have been deteriorated in year 2020 as compared to year 2019 due to decline in sales and accordingly all ratios have also been declined. The receivable turnover ratio has been declined from 8.75 times to 6.73 times and receivable o/s period has been increased by...
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