Question 8 Calculate and interpret liquidity ratios

a. Calculate the Accounts receivable turnover and the Average Collection period for 2018 and 2017 for the Better Books Company.

b. Assuming that they have a 60-day credit policy, evaluate their accounts receivable management and recommend ways to improve it.

c. If a company has an average collection of 10 days, what might this indicate?

Selected information ($)	2018	2017	2016
Net Sales (90% on credit)	8,30,000	6,20,000	5,40,000
Accounts Receivable	1,98,000	1,51,000	1,26,000
Allowance for doubtful accounts	30,900	22,500	12,000
Bad debt expense	30,000	29,500	25,000