Shelia works in the Accounting department of Snap-On Tool In…
Shelia works in the Accounting department of Snap-On Tool Inc. Many of Snap-On Tool’s customers are large construction contractors, who purchase very large quantities of tools at a time to complete major construction projects. In the second quarter of 2025, Shelia noticed that most of the customers with very large orders purchased them on 90-day payment plans. In turn, the accounts receivable balance for Snap-On Tool Inc. for the second quarter of 2025 is quite substantial and significantly higher than usual. What type of risk does this account receivables balance pose to Snap-On Tools?