The ﬁnancial ratio days' sales in receivables is measured as:
A) Receivables turnover plus 365 days.
B) Accounts receivable times 365 days.
C) Accounts receivable plus sales, divided by 365 days.
D) 365 days divided by receivables turnover.
E) 365 days divided by accounts receivable.

Question

Quizplus · Accepted Answer

Days' sales in receivables is measured by dividing 365 days by receivables turnover. This ratio gives the average number of days it takes for a company to collect its receivables.

The ﬁNancial Ratio Days' Sales in Receivables Is Measured As