Accounts Receivable Analysis

Xavier Stores Company and Lestrade 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 (in millions):

	Xavier		Lestrade
Sales	$8,500,000		$4,585,000
Credit card receivables-beginning	820,000		600,000
Credit card receviables-ending	880,000		710,000

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

	Xavier		Lestrade
1. Accounts receivable turnover	fill in the blank 1		fill in the blank 2
2. Number of days' sales in receivables	fill in the blank 3	days	fill in the blank 4	days

b. Xavier's accounts receivable turnover is much

higherlower

than Lestrade's. The number of days' sales in receivables is

higherlower

for Xavier than for Lestrade. These differences indicate that Xavier is able to turn over its receivables

lessmore

quickly than Lestrade. As a result, it takes Xavier

lessmore

time to collect its receivables.