Question

Suppose the 2025 financial statements of 3M Company report credit sales of $21.00 billion. Accounts receivable (net) are $2.90 billion at the beginning of the year and $3.10 billion at the end of the year.

Compute 3M's accounts receivable turnover. (Round answer to 1 decimal place, e.g. 12.5.) Accounts receivable turnover____ times

Answer 1

3M's accounts receivable turnover for the year 2025 is calculated to be 7.0 times, determined by dividing the credit sales of $21.00 billion by the average accounts receivable of $3.00 billion.

Step-by-step explanation:

To compute 3M's accounts receivable turnover, we use the formula turnover = net credit sales / average accounts receivable. The average accounts receivable is calculated by taking the sum of the beginning and end-of-year receivables and dividing by 2. Therefore, the average accounts receivable is ($2.90 billion + $3.10 billion) / 2 = $3.00 billion. With credit sales of $21.00 billion, the accounts receivable turnover is calculated as follows:

Accounts receivable turnover = $21.00 billion / $3.00 billion = 7.0 times

Thus, 3M's accounts receivable turnover for the year 2025 would be 7.0 times.