A company has net sales of $624,000 and average accounts receivable of $160,000. What is its accounts receivable turnover for the period?
Financial ratios are indicators of a financial performance of a company. Common ratios are return on sales, return on assets, asset turnover and debt to equity ratio.
Answer and Explanation:
Accounts receivable turnover is computed as follows:
Accounts receivable turnover = Net sales / Average accounts receivable
Accounts receivable turnover = $624,000 / $160,000
Accounts receivable turnover = 3.9
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Learn more about this topic:
from Accounting 101: Financial AccountingChapter 13 / Lesson 6