Accounts Receivable Turnover Ratio (1 Viewer)

[chickenntaters]

What is it?
I'm so confused because my teacher says it is: accounts receiveable/daily credit sales to give an answer in days. But the teacher of the other business class says it is: credit sales/accounts receivable.
Which one is it?

 

[Gavvvvvin]

It is sales/accounts recievable.

 

[chickenntaters]

It is sales/accounts recievable.

Thanks for the quick reply!
So with that ratio, the higher it is the better right? Also, is it total daily sales or yearly sales?

 

[Gavvvvvin]

Thanks for the quick reply!
So with that ratio, the higher it is the better right? Also, is it total daily sales or yearly sales?

I dunno about that stuff . . . financial ratios isnt one of my strong points

 

[cro_angel]

the lower the better..
the number that you get.. you divide it into 365 to get it into days.. and its best to try and have it under 30 days
it means how often you collect your debts.. the more often you get money from the debtors the better (improves cash flow etc..)

 

[dark`secrets]

its to find the efficieny of the business

accounts receivable/annual sales divided by 365

 

[xbrlchina]

But some book writed:

NET ANNUAL SALES???



Which is correct???Thank you!

 

[Jerruy]

365/ (Credit Saled/Accounts Receivable)

 

[looie]

My text book says that the Accounts Receivable Turnover Ratio is:

Number of days in a year, 365 (366 leap year) divided by the result from the following formula -

Sales/accounts recieveable.


Its basically the gayest and most annoying to learn ratio.

 

[n i k k i]

omg i hate business studies i dntno why i picked it .. well actually i had nothin else to do !!! .... iT SUCKS !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

so much remembering little stuff .. such a broad subject !!

LETTING OUT MY FEAR FOR BUSInESS STUDIES

 

[Elzisgreat]

What is it?
I'm so confused because my teacher says it is: accounts receiveable/daily credit sales to give an answer in days. But the teacher of the other business class says it is: credit sales/accounts receivable.
Which one is it?

both worng its sales/accounts receivables divided by 365

 

[blakegman]

easiest formula in my opinion is

account receivable/ (sales divided by 365)

gives u the answer in days

 

[Buiboi]

why are there ppl posting up both


(sales/ac rec abd ac rec/sales) divide by 365?

waths the formula?!?

i had sales/ac rec in book but then in the success one book, there was a mcq on the formula and it workede with ac rec/sales!??!?! wtf?

 

[CMCDragonkai]

I want to know too. Which is the right formula.

1. Net Credit Sales/Average Accounts Receivable

2. Sales/Average Accounts Receivable.

Second one is easy.

But if the formula is the 1. Then how do we calculate Net Credit Sales?

 

[Dreams]

Sales/Accounts Receivable = Y

365/Y = accounts receivable ratio expressed per number of days