The Limited Brands Inc. sells women's clothing and personal health care products through specialty retail stores including

Question:

The Limited Brands Inc. sells women's clothing and personal health care products through specialty retail stores including Victoria's Secret and Bath & Body Works stores. The Limited Brands reported the following (in millions) for two recent years:

____________________________Year 2 ____________Year 1

Sales .................................. $10,364 .................. $9,613

Accounts receivable ..................... 269 ...................... 267

Assume that accounts receivable (in millions) were $249 at the beginning of Year 1.

a. Compute the accounts receivable turnover for Year 2 and Year 1. Round to one decimal place.

b. Compute the day's sales in receivables for Year 2 and Year 1. Use 365 days and round to one decimal place.

c. What conclusions can be drawn from these analyses regarding The Limited Brands' efficiency in collecting receivables?

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...