American Eagle Outfitters, Inc. sells clothing, accessories, and personal care products for men and women through its retail stores. American Eagle reported the following data (in millions) for two recent years:

Assume that accounts receivable (in millions) were $87 million at the beginning of Year 1.

a. Compute the accounts receivable turnover for Year 2 and Year 1. Round to two decimal places.

b. Compute the day’s sales in receivables for Year 2 and Year 1. Use 365 days and round to one decimal place.

c. What conclusions can be drawn from these analyses regarding American Eagle Outfitters’ efficiency in collecting receivables?

Transcribed Image Text:

Year 2 Year 1 Sales $4,036 $3,796 93 78 Accounts receivable