The financial ratio which indicates the speed at which a company collects its accounts receivable. If a company’s turnover is 10, this means the company’s accounts receivable are turning over 10 times per...
The financial ratio which indicates the speed at which a company collects its accounts receivable. If a company’s turnover is 10, this means the company’s accounts receivable are turning over 10 times per...
What is the accounts receivable turnover ratio? Definition of Accounts Receivable Turnover Ratio The accounts receivable turnover ratio (or receivables turnover ratio) is an important financial ratio that indicates a...
In some countries turnover refers to sales. Turnover is also associated with some financial ratios such as the inventory turnover ratio, the accounts receivable turnover ratio, and asset turnover ratio.
Which financial ratios are considered to be efficiency ratios? I consider the efficiency ratios to be the ratios also known as asset turnover ratios, activity ratios, or asset management ratios. These efficiency ratios...
the past year. Example of Calculating Days’ Sales in Accounts Receivable The days’ sales in accounts receivable can be calculated as follows: the number of days in the year (use 360 or 365) divided by the accounts...
: Divide company’s net credit sales for the year by 360 or 365 days = average credit sales per day Divide the average balance in Accounts Receivable during the year by #1 An alternative calculation is to use the...
is also referred to as the days’ sales in accounts receivable. Formula for Calculating the Average Collection Period One formula for calculating the average collection period is: 365 days in a year divided by the...
Our Explanation of Working Capital and Liquidity provides you with an in-depth look at the components of working capital and the challenges of converting current assets to cash before obligations come due. You will see...
the efficiency or effectiveness of a company’s management. Examples of Turnover Ratios Some of the turnover ratios are: accounts receivable turnover ratio inventory turnover ratio total assets turnover ratio fixed...
to as liquidity ratios or short-term solvency ratios since they assist in evaluating a company’s ability to pay its current obligations: Working capital Current ratio Quick ratio Accounts receivable turnover ratio...
current ratio, but may not have liquidity. Hence, the inventory turnover ratio and the accounts receivable turnover ratio can provide insights as to a company’s ability to convert its current assets to cash in time to...
is calculated by dividing a company’s cost of goods sold during a year by the average inventory during the same year. Accounts receivable turnover ratio. This ratio is computed by dividing the credit sales during a...
receivable turnover ratio. average collection period (or) days' sales in accounts receivable This metric results when 365 or 360 days is divided by the accounts receivable turnover ratio. Mark as wrong Mark as...
ratio, here are some additional accounting/financial ratios: Quick ratio Debt to equity ratio Accounts receivable turnover ratio Days’ sales in inventory Interest coverage ratio Gross margin ratio Return on...
is the sum of the following: the days’ sales in inventory (365 days/inventory turnover ratio), plus the average collection period (365 days/accounts receivable turnover ratio) The operating cycle has...
receivable turnover ratio (or receivables turnover ratio) Average collection period (or days’ sales in accounts receivable) The accounts receivable turnover ratio is calculated by dividing a company’s net credit...
Receivable of $80,000) / current liabilities of $120,000 = $120,000 / $120,000 = 1 or 1:1 or 1 to 1. : 1. 14. During a recent year, a company's accounts receivable had an average balance of $60,000 and...
securities + accounts receivable is divided by the company’s current liabilities. Mark as wrong Mark as right accounts receivable turnover ratio This ratio results when total credit sales for a year are divided by the...
was $__________. 41. The quick ratio at December 31, 2023 was __________:1. (Show the answer to two decimal points, such as 1.89:1.) 42. The denominator that should be used to calculate the accounts receivable turnover...
... Accounts payable Accounts receivable Cash Inventory 6. Which of the following will result in an increase in the quick ratio? Select... Collection of an account receivable Sales of products on credit 7. Which of the...
Our Explanation of Accounts Receivable and Bad Debts Expense helps you understand the accounting for the losses associated with selling goods and providing services on credit. You will understand the impact on the...
__________ __________ __________ time. Select... an interval of a moment in 9. The accounts receivable turnover ratio is best calculated using net __________ sales. Select... cash credit cash and credit 10. The payment...
Our Explanation of Financial Ratios includes calculations and descriptions of 15 financial ratios. As you calculate the financial ratios you will also gain a deeper understanding of a company's operations and financial...
! The inventory turnover = Cost of Goods Sold DIVIDED BY average Inventory. In this case that means $525,000 DIVIDED BY $105,000 = 5.0 7.9 Wrong. See the calculations for 5.0. 9. The accounts receivable turnover ratio...
Our Explanation of Financial Ratios includes calculations and descriptions of 15 financial ratios. As you calculate the financial ratios you will also gain a deeper understanding of a company's operations and financial...
Our Explanation of Working Capital and Liquidity provides you with an in-depth look at the components of working capital and the challenges of converting current assets to cash before obligations come due. You will see...
at $95,000 and ended at $105,000. The accounts receivable turnover ratio for the year was ______ times. Select... 8 10 12 15 View Coaching Let's refer to the receivables turnover ratio as RTR. RTR = net credit...
minus current liabilities is __________ __________. 9. If a company has an inventory turnover ratio of 6, its average days’ sales in inventory is approximately __________ days. (Round to the nearest whole day.) 10. A...
ratio is computed by dividing the net credit __________ sales for the year by the average amount of accounts receivable during the year. 28. The days' sales in accounts receivable is calculated by dividing...
of appliances for cash at its retail outlet store. During the year, ABC Corp’s accounts receivable increased steadily from $85,000 to $115,000. ABC Corp’s receivables turnover ratio was closest to which of the...
A ratio consisting of an income statement account balance divided by the average balance of a balance sheet account. For example, the inventory turnover is computed as follows: Cost of Goods Sold divided by the average...
]. Receivables Turnover Ratio The receivables turnover ratio is an indicator of how fast a company’s accounts receivable are (or were) collected. The calculation is: credit sales for a year divided by the average...
is the __________-test ratio. 6. The numerator in the calculation of the receivable turnover ratio is the net credit __________ for the year. 7. The inventory turnover ratio is best computed with the numerator being the...
The mathematical result of sales revenues divided by average total assets during the period of the sales.
This ratio relates the costs in inventory to the cost of the goods sold. To learn more about this ratio, see Explanation of Financial Ratios.
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