A company reports the following results in its financial statements:
Calculate the company accounts receivable turnover for Year 2 and Year 3.Compare these two results and give a possible explanation for any significant change.

Year 2: Accounts receivable turnover:
$2,100,000/[($165,000+$167,000)/ 2] = 12.7 times
Year 3: Accounts receivable turnover:
$2,500,000/[($167,000+$172,000)/ 2] = 14.7 times
The company's accounts receivable turnover has increased from 12.7 in Year 2 to 14.7 in Year 3.This increase in accounts receivable turnover may indicate that the company has tightened its credit policy or that it has improved on its collection efforts regarding receivables.