Compute the account receivable turnover for year one and two

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Accounts receivable turnover and days' sales in receivables

The Limited Brands Inc.sells women's clothing and personal health care products through specialty retail stores including Victoria's Secret and Bath & Body Works stores. The

Limited Brands reported the following (in millions) for two recent years:


year2

year1

Sales

$10,364

$9,613

Accounts receivable

269

267

Assume that accounts receivable (in millions) were $249 at the beginning of Year 1.

a. Compute the accounts receivable turnover for Year 2 and Year 1. Round to one decimal place.

b. Compute the day's sales in receivables for Year 2 and Year 1. Use 365 days and round to one decimal place.

c. What conclusions can be drawn from these analyses regarding The Limited Brands' efficiency in collecting receivables?

Reference no: EM13879246

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