Homework Answers
Ans:
a) Accounts receivable turnover:
= Net sales/Average accounts receivable
Average accounts receivable:
=(Beginning accounts receivable+Ending accounts receivable)/2
b) Average collection period:
= 365 days/Accounts receivable turnover
2012:
Average collection period = 365/12.28
= 29.72
= 30 days (Rounded to nearest whole number)
Average collection period = 30days (2012)
2013:
Average collection period = 365/10.28
= 35 days (Rounded to nearest whole number)
Average collection period = 35days (2013)
c) Deteriorated
As your answers were almost correct, I just gave formulae for the first answer and supporting work for the second answer.
If any doubts or queries please comment and clarify I'll explain ASAP
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1) accounts receivable turnover (2 decimal places)
2) average collection period (365 days in a year)
3) inventory turnover (2 decimal places round)
4) average sale period (365 days in a year)
5)operating cycle
6)total asset turnover
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Calculate the accounts receivable turnover, average collection
period (days), inventory turnover, fixed asset turnover, and total
asset turnover for each period.
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