Accounts Receivable Turnover Ratio Formula Calculation and Examples

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In this video on Accounts Receivables Turnover Ratio formula, we are going to discuss its uses along with practical examples and many more.. • • 𝐀𝐜𝐜𝐨𝐮𝐧𝐭𝐬 𝐑𝐞𝐜𝐞𝐢𝐯𝐚𝐛𝐥𝐞𝐬 𝐭𝐮𝐫𝐧𝐨𝐯𝐞𝐫 𝐫𝐚𝐭𝐢𝐨 𝐜𝐚𝐥𝐜𝐮𝐥𝐚𝐭𝐢𝐨𝐧 • ------------------------------------------------------------------------------------ • Accounts Receivables turnover ratio computes the proportion of how much net credit sales a firm has and how much average accounts receivables the firm is dealing with. • • 𝐀𝐜𝐜𝐨𝐮𝐧𝐭𝐬 𝐑𝐞𝐜𝐞𝐢𝐯𝐚𝐛𝐥𝐞𝐬 𝐓𝐮𝐫𝐧𝐨𝐯𝐞𝐫 𝐑𝐚𝐭𝐢𝐨 𝐅𝐨𝐫𝐦𝐮𝐥𝐚 • --------------------------------------------------------------------------------- • Receivables turnover ratio = Net Credit Sales / Average Accounts Receivables • • 𝐀𝐜𝐜𝐨𝐮𝐧𝐭𝐬 𝐑𝐞𝐜𝐞𝐢𝐯𝐚𝐛𝐥𝐞𝐬 𝐓𝐮𝐫𝐧𝐨𝐯𝐞𝐫 𝐑𝐚𝐭𝐢𝐨 𝐄𝐱𝐚𝐦𝐩𝐥𝐞 • --------------------------------------------------------------------------------- • Big C Inc. has the following information – • Net Credit Sales – $700,000 • Accounts Receivables (Opening) – $50,000 • Accounts Receivables (Closing) – $70,000 • Find out the Accounts Receivables Turnover Formula. • First, we will find out the average accounts receivables (net). • Average Accounts Receivables (net) = ($50,000 + $70,000) / 2 = $60,000 • By using the formula of Accounts receivables turnover, we get – • Accounts Receivables Turnover= Net Credit Sales / Average Accounts Receivables • = $700,000 / $60,000 = 12 times • To know more about Accounts Receivables Turnover Ratio, you can go to this 𝐥𝐢𝐧𝐤 𝐡𝐞𝐫𝐞: https://www.wallstreetmojo.com/accoun... • Connect with us! • Youtube ► / @wallstreetmojo • LinkedIn ► / mycompany • Facebook ► / wallstreetmojo • Instagram ► / wallstreetmojoofficial • Twitter ► / wallstreetmojo

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