Question

Stealth Company's December 31, 2021 and 2020, financial statements are presented below: 2021 2020 Accounts receivable $ 29,500 $ 42,000 Inventory 30,000 39,000 Net sales (all credit) 196,000 197,000 Cost of goods sold 124,000 110,000 Total assets 429,000 409,000 Total stockholders' equity 250,000 227,000 Net income 39,500 33,000 Stealth Company's 2021 receivables turnover ratio is:_______.

Answer 1

5.48 times

Step-by-step explanation:

Calculation to determine what Stealth Company's 2021 receivables turnover ratio is

Using this formula

Receivables turnover ratio= 2021 Net sales/(2021 Accounts receivable+2021 Accounts receivable)/2

Let plug in the formula

Receivables turnover ratio= $196,000($29,500 +$42,000)/2

Receivables turnover ratio= $196,000/($71,500/2)

Receivables turnover ratio= $196,000/$35,750

Receivables turnover ratio= 5.48 times

Therefore Stealth Company's 2021 receivables turnover ratio is 5.48 times