Baldwin Landscaping Services Is Entering Its Fifth Year of Operations

Essay

Baldwin Landscaping Services is entering its fifth year of operations and is currently performing its year-end analysis. Organizational management evaluates both financial and nonfinancial measures to determine what areas may need improvement. They asked Karen, a staff accountant, to collect some data and perform an analysis on their accounts receivable. Karen has gathered the following information: Use the information above to answer the following questions. (Use 365 days in each year, and round all calculations to two decimal places.)
a. What are the Accounts Receivable Turnovers in Years 1 and 2, and what is the percentage change between years?
b. What are the Days' Sales in Receivables in Years 1 and 2, and what is the change between years?
c. Based on this initial analysis, which year was more efficient at collection of accounts receivables, and what changes could the organization make (if any) to improve these financial metrics?