Refer to the figure above. The firm's receivable turnover is
A) 5.0x
B) 1.7x
C) 6.25x
D) 0.2x

Question

Quizplus · Accepted Answer

The receivable turnover is calculated by dividing net credit sales by average accounts receivable. From the figure, we can see that net credit sales is $312,500 and average accounts receivable is $50,000. Thus, the receivable turnover ratio is $312,500/$50,000 = 6.25 times. Therefore, the best choice is option C, which corresponds to a receivable turnover of 6.25x.

Refer to the Figure Above