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17 July, 12:27

A company reports the following information for the year: Net credit sales $ 120,000 Average accounts receivable 20,000 Cash collections on credit sales 100,000 What is the company's receivables turnover ratio?

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  1. 17 July, 12:38
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    receivable turnover ration = 6

    Explanation:

    credit sales = 120000

    Credit sales = As we know that: Receivables turnover ration = Net credit sales / Average account receivable.

    = 120000 / 20000

    = 6.

    it indicates that company convert its receivable to cash 6 times that year.
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