Question

The following information is from the annual financial statements of Nancy Company.

2013 2012 2011
Net sales $357,000 $278,000 $325,000
Account receivable, net (year-end) 52,900 49,700 46,400
What is the accounts receivable turnover ratio for 2012?

Answer 1

5.79 times

Step-by-step explanation:

The computation of the Accounts receivable turnover ratio

= Credit sales ÷ average accounts receivable

where,

Average accounts receivable = (Opening balance of Accounts receivable + ending balance of Accounts receivable) ÷ 2

= ($46,400 + $49,700) ÷ 2

= $48,050

And, the net credit sale is $278,000

Now put these values to the above formula

So, the answer would be equal to

= $278,000 ÷ $48,050

= 5.79 times