Answered

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four companies each have a credit term period of 45 days. based on each company’s net credit sales and average net accounts receivable for 2022, which company is most successful at collecting their accounts receivable?

Sagot :

The company that will be most successful at collecting their accounts receivable will be Company 4.

From the complete information, the account receivable turnover of company 1 will be:

= 2.6 million / 198,000

= 13.13

The account receivable turnover of company 2 will be:

= 150000 / 12000

= 12.5

The account receivable turnover of company 3 will be:

= 490000 / 27000

= 20.11

The account receivable turnover of company 4 will be:

= 1.4 million / 153000

= 9.15

Since company 4 had an average collection period of 39.9 days and this is longer than its credit term period. Therefore, it'll be the most successful at collecting their accounts receivable.

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