Use the data in Exercises 9-27 and 9-28 to analyze the accounts receivable turnover ratios of the Campbell Soup Company and American Eagle Outfitters, Inc. 

a. Compute the average accounts receivable turnover ratio for Campbell Soup and American Eagle for the years shown in Exercises 9-27 and 9-28. 

b. Does Campbelll Soup or American Eagle have the higher average accounts receivable turnover ratio?

c. Explain why the average turnover ratios are different in (b).

Data from  Exercises 9-27.

The Campbell Soup Company manufactures and markets food products throughout the world. The following sales and receivable data (in millions) were reported by Campbell Soup for two recent years:

Assume that the accounts receivable (in thousands) were $638 million at the beginning of Year 1. 

Data from Exercises 9-28.

American Eagle Outfitters, Inc. sells clothing, accessories, and personal care products for men and women through its retail stores. American Eagle reported the following data (in millions) for two recent years:

Assume that accounts receivable (in millions) were $87 million at the beginning of Year 1.

Transcribed Image Text:

Year 2 Year 1 Sales $8,685 $7,890 Accounts receivable 805 616