TechCom Had Net Sales of $315,000 and Average Accounts Receivable

question 140

Essay

TechCom 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 receivable of $81,350. Calculate the accounts receivable turnover ratio for both companies. Which company is doing a better job of managing its accounts receivable (all other things assumed to be equal)?

---

Definitions:

Synthetic Theory

Also known as the modern synthesis, it combines Darwin's theory of evolution with Mendelian genetics, explaining evolution as changes in gene frequencies within populations.

Evolution

The mechanism by which diverse living entities are considered to have emerged and spread from their predecessors over the course of earthly history.

Genetic Changes

Alterations in the DNA sequence of an organism, which can be due to mutations, gene flow, genetic drift, or natural selection.

Vertebrates

A subphylum of chordates that includes fishes, amphibians, reptiles, birds, and mammals; possess a bony vertebral column.