The average number of days to collect receivables is calculated as 365 divided by the receivables turnover. Receivables turnover is calculated as net annual credit sales divided by average receivables.
The average number of days to collect receivables is calculated as 365 divided by the receivables turnover ratio. Receivables turnover is calculated as net annual credit sales divided by average receivables. Credit sales were $6,205,000 and average receivables were $335,000 (the average of the beginning and ending balances). This gives a receivables turnover ratio of 18.52. Dividing 365 by 18.52 gives us 19.71 days as the number of days to collect receivables.
The average number of days to collect receivables is calculated as 365 divided by the receivables turnover ratio. Receivables turnover is calculated as net annual credit sales divided by average receivables.
The average number of days to collect receivables is calculated as 365 divided by the receivables turnover ratio. Receivables turnover is calculated as net annual credit sales divided by average receivables.
|
Volpone Company's average number of days to collect accounts receivable for the current year is