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

question 34

Essay

Tecom 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 receivables of $81,350. Calculate the accounts receivable turnover for both companies. Which company is doing a better job of managing its accounts receivables?

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Definitions:

Nondiscriminating Monopolist

A monopolist that charges all consumers the same price for its product, without price discrimination.

Pure Monopolists

Companies that are the sole providers of a product or service in a market, facing no direct competition.

Large-Scale

Refers to operations or activities on a wide or extensive level, often involving the production of goods in large quantities or operations of large organizations or systems.

Profit-Maximizing Price

The price level at which a company can make the most profit while selling its goods or services.