Flax had net sales of $7,875 and its average accounts receivables is $1,250.Calculate Flax's accounts receivable turnover:

Accounts Receivable Turnover

A financial ratio that measures how efficiently a company collects revenue from its credit sales, calculated as sales divided by average accounts receivable.

Net Sales

The total revenue from sales transactions after deducting returns, allowances, and discounts.

Average Accounts Receivables

The average amount of money owed to a company by its customers for goods or services provided on credit over a specific period.

Perform calculations and conduct analyses on the ratio of accounts receivable turnover.
Utilize accounts receivable turnover to scrutinize financial results for evaluating company efficacy in receivables management.

Verified Answer

Mathieu GrindlayAug 01, 2024

Final Answer :

Accounts Receivable Turnover = Net Sales/Average Accounts Receivables

\quad

\quad

Accounts Receivable Turnover = $7,875/$1,250 = 6.3 times

Learning Objectives

Perform calculations and conduct analyses on the ratio of accounts receivable turnover.
Utilize accounts receivable turnover to scrutinize financial results for evaluating company efficacy in receivables management.

Flax had net sales of $7,875 and its average accounts receivables is $1,250.Calculate Flax's accounts receivable turnover:

Definitions

Learning Objectives

Learning Objectives

Related questions