The following information is from the annual financial statements of Nancy Company.
$\begin{array}{lrrr}&2010&2009&2008\
\text { Net Sales } & \$ 307,000 & \$ 238,000 & \$ 285,000 \
\text { Accounts Receivable, net (year-end) } & 47,900 & 45,700 & 42,400
\end{array}$
What is the accounts receivable turnover ratio for 2009?

Question

Quizplus · Accepted Answer

The accounts receivable turnover ratio is calculated by dividing net sales by the average accounts receivable. For 2009, 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