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).
In Exercises 9-27
______________________Year 2 _____________Year 1
Sales ....................... $11,649,079 ............ $10,706,588
Accounts receivable .......... 993,510 ............... 1,265,032
In Exercises 9-28
____________________________Year 2 ____________Year 1
Sales .................................. $10,364 .................. $9,613
Accounts receivable ..................... 269 ...................... 267