Accounts Receivable Turnover and Days' Sales in Receivables

Classic Company designs, markets, and distributes a variety of apparel, home decor, accessory, and fragrance products. The companys products include such brands as Polo by Classic, Classic Purple Label, Classic, Polo Jeans Co., and Chaps. Polo Classic reported the following for two recent years:

	For the Period Ending
	Year 2		Year 1
Sales	$5,461,860		$5,424,995
Accounts receivable	624,150		646,050

Assume that accounts receivable were $573,050 at the beginning of Year 1.

a. Compute the accounts receivable turnover for Year 2 and Year 1. Round to one decimal place.

Year 2:	..........
Year 1:	..........

b. Compute the days' sales in receivables for Year 2 and Year 1. Round to one decimal place. Use 365 days per year in your calculations.

Year 2:	........... days
Year 1:	........... days

c. The change in the accounts receivable turnover from year 1 to year 2 indicates a(n)

............... in the efficiency of collecting accounts receivable and is a(n)

............... change. The change in the days' sales in receivables is a(n)

............... change.