Accounts Receivable Turnover for Best Buy and Radio Shack The following information was summarized from a recent

Question:

Turnover for Best Buy and Radio Shack The following information was summarized from a recent annual report of Best Buy Co. Inc.:
(In millions)
Receivables:
February 28, 2009 ....................$ 1,868
March 1, 2008 .......................549
Revenue for the year ended:
February 28, 2009 ..................45,015
March 1, 2008 .....................40,023
The following information was summarized from a recent annual report of Radio Shack Corporation:
(In millions)
Accounts and notes receivable, net
December 31, 2008 .................$ 241 .9
December 31, 2007 ..................256.0
Net sales and operating revenues for the year ended:
December 31, 2008 ..................4,224.5
December 31, 2007 4,251 .7

Required
1. Calculate the turnover ratios for Best Buy and Radio Shack for the most recent year.
2. Calculate the average collection period, in days, for both companies for the most recent year. Comment on the reasonableness of the collection periods for these companies considering the nature of their business.
3. Which company appears to be performing better? What other information should you consider in determining how these companies are performing? LO2388 Chapter 7 Receivables and Investments

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...