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Accounts Receivable Analysis A company reports the following: Net sales $1, 062, 880 Average accounts receivable (net) 66, 430 Determine (a) the accounts receivable turnover and (b) the number of days’ sales in receivables. Round interim calculations to the nearest dollar and final answers to one decimal place. Assume a 365-day year. a. Accounts receivable turnover b. Number of days’ sales in receivables days
Expert Answer
a)
Accounts receivable turnover = Net credit sales/Average accounts receivable
= 1062880/66430 = 16
b)
Number of days sales in receivables = Number of days in a year/Accounts receivable turnover
= 365/16 = 22.8125 days
a)
Accounts receivable turnover = Net credit sales/Average accounts receivable
= 1062880/66430 = 16
b)
Number of days sales in receivables = Number of days in a year/Accounts receivable turnover
= 365/16 = 22.8125 days
