Accounts Receivable Turnover for Best Buy and Circuit City The following information was summarized from a recent annual report of Best Buy Co. Inc.:

The following information was summarized from a recent annual report of Circuit City Stores, Inc. (Receivables are net of allowances.)

Required 1. Calculate the accounts receivable turnover ratios for Best Buy and Circuit City for 2007.
2. Calculate the average collection period, in days, for both companies for 2007. Comment on the reasonableness of the collection periods for these companies considering the nature of their business.
3. Which company appears to be performing better? What other information should you consider in determining how these companies are performing?

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Receivables: March 3, 2007 February 25, 2006 Revenues for the year ended: March 3, 2007 February 25, 2006 (In millions) $ 548 449 35,934 30,848