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A company reports the following information for the year: Net credit sales $ 120,000 Average accounts receivable 20,000 Cash collections on credit sales 100,000 What is the company's receivables turnover
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A company reports the following information for the year: Net credit sales $ 120,000 Average accounts receivable 20,000 Cash collections on credit sales 100,000 What is the company's receivables turnover ratio?

User Helo
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4 votes

Answer:

receivable turnover ration = 6

Step-by-step explanation:

credit sales = 120000

Credit sales =As we know that: Receivables turnover ration = Net credit sales /Average account receivable.

= 120000/ 20000

= 6.

it indicates that company convert its receivable to cash 6 times that year.

User JustinHo
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