Question
The following information is from the annual financial statements of Raheem Company. Year 3 Year 2 Year 1 Net sales $ 242,000 $ 173,000 $
The following information is from the annual financial statements of Raheem Company.
| Year 3 | Year 2 | Year 1 | |
|---|---|---|---|
| Net sales | $ 242,000 | $ 173,000 | $ 214,000 |
| Accounts receivable, net (year-end) | 48,100 | 45,900 | 42,600 |
(1) Compute its accounts receivable turnover for Year 2 and Year 3.
(2) Assuming its competitor has a turnover of 7.7, is Raheem performing better or worse at collecting receivables than its competitor?
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Managerial Finance Essentials
Authors: Charles O. Kroncke, Alan E. Grunewald, Erwin Esser Nemmers
2nd Edition
0829901590, 978-0829901597
