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Accounts Receivable Analysis Shelby Stores Company and Landon Stores Inc., are large retail department stores. Both companies offer credit to their customers through their own
Accounts Receivable Analysis Shelby Stores Company and Landon Stores Inc., are large retail department stores. Both companies offer credit to their customers through their own credit card operations. Information from the financial statements for both companies for two recent years is as follows (all numbers are in millions): Shelby Landon $419,750 Merchandise sales Credit card receivables-beginning Credit card receivables-ending $299,300 66,677 55,667 76,021 58,529 a. (1). Determine the accounts receivable turnover for both companies. Round to one decimal place. Shelby Stores Landon Stores (2). Determine the number of days' sales in receivables for both companies. Assume there are 365 days in the year. Round intermediate calculations to the nearest whole dollar and final answers to one decimal place. Shelby Stores days Landon Stores days b. What conclusion can be drawn regarding the two companies and their credit card policies? Shelby Stores is able to collect its credit card receivables more quickly than Landon Stores
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