Asked by Elijah Filsinger on May 07, 2024
Verified
Powers Company reported net sales of $1,200,000,average Accounts Receivable,net of $78,500,and net income of $51,025.The accounts receivable turnover ratio is:
A) 0.65 times.
B) 14.3 times.
C) 28.6 times.
D) 15.3 times.
E) 16.3 times.
Accounts Receivable Turnover
A financial ratio measuring how many times a company collects its average accounts receivable balance within a certain period.
Average Accounts Receivable
An accounting metric that represents the average amount of money owed to a company by its customers over a specific time period.
Net Sales
The amount of sales generated by a company after deductions for returns, allowances for damaged or missing goods, and discounts.
- Gain proficiency in computing and understanding pivotal financial ratios like inventory turnover, accounts receivable turnover, and the dividend yield ratio.
- Estimate the median inventory level, evaluate the accounts receivable turnover ratio, and calculate the total asset turnover with the data provided.
Verified Answer
= $1,200,000 / $78,500
= 15.3 times.
Therefore, the answer is D.
Learning Objectives
- Gain proficiency in computing and understanding pivotal financial ratios like inventory turnover, accounts receivable turnover, and the dividend yield ratio.
- Estimate the median inventory level, evaluate the accounts receivable turnover ratio, and calculate the total asset turnover with the data provided.
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