Flying Tigers, Inc, has net sales of $719,000 and account receivables of $158,000. What is the firm's account receivable turnover?
Accounts receivable represent the current asset of the company as it indicates the amount that the company has to receive from its customers for making them credit sales. The number of times in a fiscal year, that a company collects cash from its receivables is termed as receivables turnover. The ratio is computed by dividing the annual credit sales with the average or ending receivables balance.
Answer and Explanation:
Flying Tigers Inc's accounts receivable turnover is 4.55 times.
Flying Tigers Inc. has provided the following data:
- Net sales = $719,000
- Accounts receivable = $158,000
- Accounts receivable turnover = Annual net sales / Accounts receivable
- Accounts receivable turnover = $719,000 / $158,000
- Accounts receivable turnover = 4.55 times
Become a member and unlock all Study Answers
Try it risk-free for 30 daysTry it risk-free
Ask a question
Our experts can answer your tough homework and study questions.Ask a question Ask a question
Learn more about this topic:
from Accounting 101: Financial AccountingChapter 7 / Lesson 1