Use the data in Exercises 9-27 and 9-28 to analyze the accounts receivable turnover ratios of H.J.

Question:

Use the data in Exercises 9-27 and 9-28 to analyze the accounts receivable turnover ratios of H.J. Heinz Company and The Limited Brands Inc.

a. Compute the average accounts receivable turnover ratio for The Limited Brands Inc. and H.J. Heinz Company for the years shown in Exercises 9-27 and 9-28.

b. Does The Limited Brands or H.J. Heinz Company have the higher average accounts receivable turnover ratio?

c. Explain the logic underlying your answer in (b).

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...