The accounts receivable turnover ratio will vary across companies, depending on the nature of the company's operations.

Question:

The accounts receivable turnover ratio will vary across companies, depending on the nature of the company's operations. For example, an accounts receivable turnover of 6 for an Internet Service Provider is unacceptable but might be excellent for a manufacturer of specialty milling equipment. A list of well-known companies follows.

1. Categorize each of the preceding companies as to whether its turnover ratio is likely to be above or below 15.
2. Based on (1), identify a characteristic of companies with accounts receivable turnover ratios above15.

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...