The following information is from the annual financial statements of Nancy Company. $\begin{array}{lrrr}
& 2013 & 2012 & 2011 \
\text { Net sales } & \$ 307,000 & \$ 238,000 & \$ 285,000 \
\text { Accounts receivable, net (year-end) } & 47,900 & 45,700 & 42,400 \
\end{array}$ What is the accounts receivable turnover ratio for 2012?

Question

The following information is from the annual financial statements of Nancy Company. $\begin{array}{lrrr} 
& 2013 & 2012 & 2011 \
\text { Net sales } & \$ 307,000 & \$ 238,000 & \$ 285,000 \
\text { Accounts receivable, net (year-end) } & 47,900 & 45,700 & 42,400 \
\end{array}$  What is the accounts receivable turnover ratio for 2012?

Quizplus · Accepted Answer

The accounts receivable turnover ratio is calculated as Net Sales divided by Average Accounts Receivable. For 2012, the average accounts receivable is $(45,700 + 42,400) / 2 = 44,050$. The turnover ratio is $238,000 / 44,050 = 5.40$.

The Following Information Is from the Annual Financial Statements of Nancy