Accounts Receivable Turnover 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.

Required 1. Compute the accounts receivable turnover for both companies.

2. What is the average length of time each company takes to collect its receivables?