Company A reported sales during the year of $1,000,000. Its average accounts receivable balance during the year was $250,000. Company B reported sales during the same year of $400,000 and had an average accounts receivable balance of $40,000.
Compute the accounts receivable turnover for both companies.
Company A: _____________ times
Company B: _____________ times
What is the average length of time each company takes to collect
its receivables? Assume 360 days in a year
Company A: _____________ days
Company B: _____________ days