Accounts Receivable Turnover for Best Buy and Circuit City The following information was… 1 answer below »

Accounts Receivable Turnover for Best Buy and Circuit City

The following information was summarized from a recent annual report of Best Buy Co. Inc.:

The following information was summarized from a recent annual report of Circuit City Stores, Inc. (Receivables are net of allowances.)

Required

1. Calculate the accounts receivable turnover ratios for Best Buy and Circuit City for 2007.

2. Calculate the average collection period, in days, for both companies for 2007. Comment on the

reasonableness of the collection periods for these companies considering the nature of their

business.

3. Which company appears to be performing better? What other information should you consider

in determining how these companies are performing?