Sandburg Veterinarian reports the following information for the year: $$\begin{array} { l r }
\text { Net credit sales } & \$ 120,000 \
\text { Average accounts receivable } & 20,000 \
\text { Cash collections on credit sales } & 100,000
\end{array}$$ What is Sandburg's receivables turnover ratio?

Question

Sandburg Veterinarian reports the following information for the year: $$\begin{array} { l r } 
\text { Net credit sales } & \$ 120,000 \
\text { Average accounts receivable } & 20,000 \
\text { Cash collections on credit sales } & 100,000
\end{array}$$ What is Sandburg's receivables turnover ratio?

Quizplus · Accepted Answer

The receivables turnover ratio is calculated by dividing net credit sales by average accounts receivable. Here, it is $120,000 / $20,000 = 6.0.

Sandburg Veterinarian Reports the Following Information for the Year What Is Sandburg's Receivables Turnover Ratio? A) 6

Sandburg Veterinarian Reports the Following Information for the Year What Is Sandburg's Receivables Turnover Ratio?
A) 6