Question

flying tigers, inc., has net sales of $774,000 and accounts receivables of $157,000. what is the firm's accounts receivables turnover? (Give your answer up to two decimal places)

Answer 1

Accounts Receivable Turnover Ratio is one of the accounting activity ratios, which measures the number of times on average, receivable are collected during the period.

Accounts receivable turnover is also known as the debtor's turnover ratio.

Accounts Receivable Turnover Ratio = Net Credit Sales / Average Accounts Receivables

net sales is consideres as net credit sales

Average accounts receivable = (opening accounts receivables + closing accounts receivables) / 2

Given Accounts Receivables are considered as average accounts receivables

Accounts Receivable Turnover Ratio = $ 774000 / $ 157000 = 4.93

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