Tecom had net sales of $315,000 and average accounts receivable of $75,600. Its competitor, ZCom, had net sales of $299,000 and average accounts receivables of $81,350. Calculate the accounts receivable turnover for both companies. Which company is doing a better job of managing its accounts receivables?

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Sanjita Gautam · Accepted Answer

Final Answer :

Tecom: $315,000/$75,600 = 4.2 times
ZCom: $299,000/$81,350 = 3.7 times
Tecom has a higher accounts receivable turnover. This implies it is doing a better job of managing its receivables than ZCom.

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