The following are summary financial data for Parker Enterprises, Inc., and Boulder, Inc., for three recent years:
|
Year 3 |
Year 2 |
Year 1 |
|
|
Net sales (in millions): |
|||
|
Parker Enterprises, Inc |
$3,700 |
$3,875 |
$3,882 |
|
Boulder, Inc |
17,825 |
16,549 |
15,242 |
|
Net accounts receivable (in millions): |
|||
|
Parker Enterprises, Inc |
1,400 |
1,800 |
1,725 |
|
Boulder, Inc. |
5,525 |
5,800 |
6,205 |
1. Using the above data, compute the accounts receivable turnover and average collection period for each company for years 2 and 3.
2. Which company appears to have the better credit management policy?