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

(In millions)

Receivables:

February 28, 2009 $ 1,868 March 1, 2008 549 Revenue for the year ended:

February 28, 2009 45,015 March 1, 2008 40,023 The following information was summarized from a recent annual report of Radio Shack Corporation:

(In millions)

Accounts and notes receivable, net December 31, 2008 $ 241.9 December 31, 2007 256.0 Net sales and operating revenues for the year ended:

December 31, 2008 4,224.5 December 31, 2007 4,251.7 Required 1. Calculate the accounts receivable turnover ratios for Best Buy and Radio Shack for the most recent year.

2. Calculate the average collection period, in days, for both companies for the most recent year. 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?

AppendixLO1