Accounting Analysis I: The Role of Accounting as an Information System | Online Course Support

What is the average collection period for Illini Company’s accounts receivable? (Round to the nearest tenth days)


First, you need to calculate the receivables turnover ratio, as follows:

Receivables turnover ratio= $8,000,000($700,000+500,000)/2

Average collection period= \frac{365}{13.33}

Illini Company takes slightly longer to collect its accounts receivable (27.4 days compared to the industry average of 25 days).

Similar Posts