Question 4

The Following information has been extracted from the annual reports of Shein Ltd and KoKo ltd.

	Shein Ltd	KoKo Ltd
Sales ( net credit) for the year	$ 41,30,420	$ 2834020
Allowance for doubtful debts 1.7.22	23,940	37940
Allowance for doubtful debts 30.6.23	31,648	44960
Accounts receivable (gross) 1.7.22	10,11,710	25200
Account receivable (gross) 30.6.23	777,280	614720

Required

1. Calculate the receivables turnover ratio and the average collection period for both companies
2. Compare the success or otherwise of their cash collection policies, given the average receivables turnover for the industry in which the companies operate is 25 Credit terms for companies are 2/10, n/30.