Annual reports of two manufacturing companies in the same industry reveal the following for a recent year (amounts in millions):

Required:
A. Compute the accounts receivable turnover for each company.
Kellogg's times per year
Quaker Oats times per year
B. Compute the average number of days that accounts receivable are outstanding for each company.
Kellogg's days
Quaker Oats days
C. Which of these two companies is managing its accounts receivable more efficiently? Collects its accounts receivable more quickly than . However, may have more liberal credit and collection policies than in an effort to stimulate sales.

Transcribed Image Text:

Sale Accounts receivable, January 1 Accounts receivable, December 31 Kellogg's Quaker Oats S3,753 $3,640 219 300 527 549