What is Red's average collection period Red Company has the following information Net credit sales 400000 Net income 100000 Average total assets 80000 Average accounts receivable 20000?

The average collection period can be calculated using the formula: Average Collection Period = (Average Accounts Receivable / Net Credit Sales) × 365. In this case, Red Company has average accounts receivable of $20,000 and net credit sales of $400,000. Thus, the average collection period is ($20,000 / $400,000) × 365, which equals 18.25 days. This means Red Company takes approximately 18 days to collect its accounts receivable.