Clement Co. and Salvatore Co. recently published their annual reports. As a prospective investor, youre interested in finding out about their cash holdings, and seeing how the businesses compare. Some of their financial data is provided below.

1. Calculate the receivables turnover ratio for each business from the information above.
2. Calculate the days-in-receivables ratio for each business from the information above.
3. Calculate the allowance ratio for each business from the information above.

2. Compare the receivables position for each business based on your answers above.

Clement Co. Salvatore Co. Net accounts receivable, opening $9 740 $8 310 Credit sales 20 000 30 000 Cash sales 34 000 22 000 Allowance for doubtful debts, opening 2 460 0 Net accounts receivable, ending 6 580 12 780 Allowance for doubtful debts, closing 2950 6 200