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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Accounts receivable analysis
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Xavier Stores Company and Lestrade Stores Inc. are large retail department stores. Both companies offer credit to their customers through their own credit card operations. In- formation from the financial statements for both companies for two recent years is as follows (all numbers are in  millions):
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 |
Xavier |
Lestrade |
Merchandise sales |
$8,500,000 |
$4,585,000 |
Credit card receivables—beginning |
820,000 |
600,000 |
Credit card receviables—ending |
880,000 |
710,000 |
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a.    Determine the (1) accounts receivable turnover and (2) the number of days’ sales in receivables for both companies. Round to one decimal place.
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b.                            Compare the two companies with regard to their credit card policies.
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