The Following Data Are Taken from the Financial Statements of Duffy

question 55

Essay

The following data are taken from the financial statements of Duffy Limited: $\begin{array}{lrr}&2014&2013\\\text { Monthly average accounts receivable } & \$ 520,000 & \$ 550,000 \\\text { Net sales on account } & 5,980,000 & 4,950,000\\\text { Terms for all sales are n/30 }\end{array}$ Instructions
a. Calculate the receivables turnover and the collection period for both years.
b. What conclusion can an analyst draw about the management of the accounts receivable?

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Definitions:

Implementation

Implementation involves putting a plan, decision, or method into effect in order to achieve an outcome or complete a process.

Process Innovation

The development of new or improved procedures, techniques, or systems in an organizational operation to enhance efficiency or quality.

Employee Innovation

The process by which employees contribute new ideas, processes, or improvements to their organization.

Organic Structures

Organizational structures characterized by flatness, low specialization, low formalization, and decentralization.