Accounts receivable turnover The accounts receivable turnover ratio will vary across companies, depending on the nature of the company’s operations. For example, an accounts receivable turnover of 6 for a retailer is unacceptable but might be excellent for a manufacturer of specialty milling equipment. A list of well-known companies follows:

Alcoa Inc. The Coca-Cola Company Kroger AutoZone, Inc. Delta Air Lines Procter & Gamble Barnes & Noble, Inc. The Home Depot Walmart Caterpillar IBM Whirlpool Corporation 1. Categorize each of the preceding companies as to whether its turnover ratio is likely to be above or below 15.

2. Based on (1), identify a characteristic of companies with accounts receivable turnover ratios above 15.