Which company has the lowest accounts receivable turnover in the year 20X2?
Mary Gonzales is evaluating companies in the office supply industry and has compiled
the following information:
20X1 20X2
Company Credit Sales ($)
Average Receivables
Balance ($) Credit Sales ($)
Average Receivables
Balance ($)
A 5.0 million 1.0 million 6.0 million 1.2 million
B 3.0 million 1.2 million 4.0 million 1.5 million
C 2.5 million 0.8 million 3.0 million 1.0 million
D 0.5 million 0.1 million 0.6 million 0.2 million
Industry 25.0 million 5.0 million 28.0 million 5.4 million
A. Company A.
B. Company B.
C. Company D.
Answer: B. Company B.
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