Calculate the accounts receivable turnover ratios

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Houston House (Pty) Ltd and Whitney Holdings are competitors in the same industry. The following information was summarised from a recent annual report of Houston House (Pty) Ltd (In millions) Receivables: December 31, 2015 R 1,968 December 31, 2014 642 Revenue for the year ended: December 31, 2015 46,980 December 31, 2014 40,023 The following information was summarised from a recent annual report of Whitney Holdings: (In millions) Accounts and notes receivable, net December 31, 2015 R 246 December 31, 2014 264 Revenues for the year ended: December 31, 2015 4,335 December 31, 2014 4,251 Required: 1. Calculate the accounts receivable turnover ratios for Houston House and Whitney Holdings for the most recent year. 2. Calculate the average collection period, in days, for both companies for the most recent year. Comment on the reasonableness of the collection periods for these companies considering the nature of their business. 3. Which company appears to be performing better? What other information should you consider in determining how these companies are performing?

Reference no: EM132068857

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