Unformatted text preview: ENT ASSETS
edtronic, a Minneapolis-based medical
technology company that developed the
first implantable heart pacemaker, manufactures products to treat patients with heart, vascular, and neurological conditions; diabetes; and
Parkinson’s disease. The company had a strong
balance sheet and cash position, but treasurer Gary Ellis was concerned to see the average collection period climbing to 88 days in October 1999. He moved quickly to regain control of the company’s operating cycle, the time from the beginning of the firm’s production process to collection
of cash from the sale of the finished product. By July 2001, the average collection period was
down to 74 days.
Medtronic takes a multipronged approach to accounts receivable (A/R) and inventory management. Sales representatives use Palm Pilots to send sales information to headquarters and to
receive A/R and inventory data. Such timely communications have helped the company avoid
incorrect billing, which had contributed to the buildup of receivables. The...
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