Accounts receivable turnover and days’ sales in receivables OBJ. 8 The Limited Brands Inc. sells women’s clothing and personal health care products through specialty retail stores including Victoria’s Secret and Bath & Body Works stores. The Limited Brands reported the following (in millions) for two recent years:

Year 2 Year 1 Sales $10,364 $9,613 Accounts receivable 269 267 Assume that accounts receivable (in millions) were $249 at the beginning of Year 1.

a. Compute the accounts receivable turnover for Year 2 and Year 1. Round to one decimal place.

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 The Limited Brands’

efficiency in collecting receivables?