The accounts receivable turnover rate for Kitlinger's Men's Wear has gone from an average of 10.6 times to 10.1 times per year. How has this change affected the firm's accounts receivable period?

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The accounts receivable turnover rate is calculated by dividing net credit sales by average accounts receivable. A higher turnover rate indicates that the firm is collecting its accounts receivable more quickly. In this case, the turnover rate has decreased, which means that the firm is taking longer to collect its accounts receivable. The accounts receivable period is calculated by dividing 365 days by the accounts receivable turnover rate. Therefore, the decrease in the turnover rate has led to an increase in the accounts receivable period. The increase in the accounts receivable period is calculated as follows:New accounts receivable period = 365 days / 10.1 times per year = 36.14 daysOld accounts receivable period = 365 days / 10.6 times per year = 34.43 daysIncrease in accounts receivable period = 36.14 days - 34.43 days = 1.71 days

The Accounts Receivable Turnover Rate for Kitlinger's Men's Wear Has