a) State the purpose of the accounts receivable turnover ratio and briefly explain how it is calculated.

b) TechCom had net sales of $315,000 and average accounts receivable of $75,600. Its competitor, ZCom, had net

sales of $299,000 and average accounts receivable of $81,350. Calculate the accounts receivable turnover ratio

for both companies. Which company is doing a better job of managing its accounts receivable (all other things

assumed to be equal)?

(7 marks)

c) In April, Hasbro had $3,875 million in sales and $990 million in accounts receivable. For the same period, Mattel

had $4,595 million in sales and $834 million in accounts receivable. Calculate the days' sales uncollected for

both companies. Which company appears to be doing a better job in managing collection of its receivables (all

other things assumed to be equal)?

(7 marks)

d) Briefly state three ways a company can convert its receivables to cash

(6 marks)