Average Accounts

     Collection Period Ratio =  Receivable         

                               ------------------  x 365                                  

                                  Net Sales

Example: The collection period ratio for F.E.D. Foods Company for 1993 is:

        ($42,000 + $33,000)/2 x 365 = 22 days 

        ------------------- 

          $633,000 

(from balance sheet, page 11, and profit and loss statement, page12, ((line 3(1993) + line 3(1992)/two)/line a x 365)