Accounting

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Assume that Hickory Company has the following data related to its accounts receivable:

2005
Net Sales $ 1,425,000
Net receivables
Beginning of year 375,000
End of year 420,000

2006
Net Sales $ 1,650,000
Net receivables
Beginning of year 333,500
End of year 375,000

Use the data to compute accounts receivable turnover ratios and average collection periods for 2005 and 2006.

Based on your analysis, is Hickory Company managing its receivables better or worse in 2006 than it did in 2005?


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