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)?

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Definitions:

Frances Hesselbein

An American expert on leadership who served as the CEO of the Girl Scouts of the USA and is known for her work in non-profit management and leadership development.

Power

The ability or capacity of an individual or group to influence or control the actions and outcomes within social or organizational contexts.

Legitimate Power

Authority that a person or a group holds that is accepted and recognized by others, often due to a formal position or role.

Reward Power

A type of power that comes from the ability to confer rewards on others for complying with one's wishes or directives.