Morgan had net sales of $310,000 and average accounts receivable of $75,600.Its competitor,Stanley,had net sales of $290,000 and average accounts receivables of $61,350.Calculate the accounts receivable turnover for both companies.Which company is doing a better job of managing its accounts receivables?

Accounts Receivable Turnover

A financial ratio that measures how efficiently a company collects cash from its credit sales by dividing net credit sales by the average accounts receivable.

Net Sales

The net income generated from sales, after subtracting the costs related to returns, compensations for damaged or lost items, and price reductions.

Average Accounts Receivable

A measure of the average amount of money owed to a company by its customers over a period.