Using Apple's 2016 10-K What was Apple's accounts receivable turnover (rounded to two decimal places) in 2015 and 2016? (Accounts receivable were $17,460,000,000 at the end of 2014.)
I'm not sure if I did it right.
Accounts Receivable turnover ratio: = Net Sales/Average Accounts Receivable.
2015
($17460 million + $16,849 million)/2 =$17154.5 million
Net Sales: $233,715 million/$17,154.5=13.62
My Answer: 2015 - 13.62 times.
2016
($16,849 million +$15,754 million)/2 = 16,301.5
Net sales: $215,639/16,301.5 = 13.22
My answer for 2016: 13.22
Please help and explain how to solve this.
Accounts receivable turnover is used to calculate the effectiveness by which company is collecting it's receivables.
A high receivables turnover ratio indicates that a company’s collection of accounts receivable is efficient. Whereas the low receivable ratio it is inefficient.
The formula of receivable turnover ratio = net credit sales / average receivables
Since credit sales is not given in the data net sales are assumed to be credit sales.
Average of receivable is taken because last date receivable doesn't indicate the receivable of whole year so avg is taken to estimate the level
2015
($17460 million + $16,849 million)/2 =$17154.5 million
Accounts receivable turnover ratio = $233,715 million/$17,154.5=13.62
2016
($16,849 million +$15,754 million)/2 = 16,301.5
Accounts receivable turnover ratio= $215,639/16,301.5 = 13.22
The answer given in the question is absolutely correct.
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