Question
The questions are already answered, I just need an explanation on how they got to their answers. Use the company information provided below to answer
The questions are already answered, I just need an explanation on how they got to their answers.
Use the company information provided below to answer each question. Round all answers to two decimal places.
Company A Company B,
Beginning Accounts Receivable $50,000, 60,000;
Ending Accounts Receivable 80,000, 90,000;
Net Credit Sales 550,000, 460,000.
What is company's A's accounts receivable turnover ratio ?
8.46 times
What is company's B's accounts receivable turnover ratio ?
6.13 times
What is the number of day's sales in receivables ratio for company A ?
43.14 days
What is the number of day's sales in receivables ratio for company B ?
59.54 days
Based off of your calculations, which company appears to convert accounts receivable to cash more efficiently ?
Company A
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