Presented here are the average days to collect accounts receivable for four companies in different industries. The data are for 2010.
Required:
Write a brief memorandum that provides possible answers to each of the following questions:
a. Why would a company that manufactures and sells airplanes (Boeing) and a company that manufacturers and sells automobiles (Ford) collect their accounts receivables in such relatively short times?
b. Why would a company that sells expensive jewelry (Zales) collect its receivables so much quicker than a company that sells toothpaste and soap (Procter & Gamble)?