Max's Tire Center Company
Selected data from the financial statements of Max's Tire Center are provided below.

- Refer to the selected data provided for Max's Tire Center. What is Max's days-in-receivables ratio in 2012?

Question

Max's Tire Center Company 
Selected data from the financial statements of Max's Tire Center are provided below.

- Refer to the selected data provided for Max's Tire Center. What is Max's days-in-receivables ratio in 2012?

Quizplus · Accepted Answer

The days-in-receivables ratio is calculated by dividing the average accounts receivable by the annual credit sales and multiplying the result by 365 days. In 2012, Max's Tire Center had average accounts receivable of $1,266,000 and annual credit sales of $2,500,000. Therefore, the days-in-receivables ratio is 50.62 days.