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
Merchandise sales	$284,700		$397,850
Credit card receivables-beginning	54,243		59,491
Credit card receivables-ending	45,285		45,803

a. Determine the (1) accounts receivable turnover and (2) the number of days' sales in receivables for both companies. Round answers to one decimal place. Assume 365 days a year.

	Shelby		Landon
1. Accounts receivable turnover
2. Number of days' sales in receivables		days		days

b. Shelby's accounts receivable turnover is SelecthigherlowerItem 5 than Landon's. The number of days' sales in receivables is SelecthigherlowerItem 6 for Shelby than for Landon. These differences indicate that Shelby is able to turn over its receivables SelectmorelessItem 7 quickly than Landon. As a result, it takes Shelby SelectmorelessItem 8 time to collect its receivables.