![]() ![]() The given values are Net Sales for the year = $ 15,000, Total assets at the beginning of the year = $ 11,500 and Total assets at the end of the year = $ 12,000. Let us take an example to calculate the Total Assets Turnover Ratio. It shows that sales and, specifically, credit sales are 20 times the accounts receivable outstanding, which is a good turnover to have, but it should be compared to previous year’s data as well as other players in the industry to have a complete analysis. Accounts Receivable Turnover Ratio = 20 times.Accounts Receivable Turnover Ratio = 60,000/ 3,000.Average Accounts Receivables = 2,500 + 3,500 / 2Īccounts Receivable Turnover Ratio is calculated using the formula given below.Īccounts Receivable Turnover Ratio = Credit Sales / Average Accounts Receivables.What are the Accounts receivable turnover ratio of the company?Īverage Accounts Receivables is calculated using the formula given below.Īverage Accounts Receivables = Opening + Closing / 2 At the beginning of the financial year, Accounts Receivables were $ 2,500, and at the end, accounts receivables were $ 3,500. Let us take another example of a company which is having net credit sales worth $ 60,000 during one financial year. Working Capital Turnover Ratio of six times shows that sales in 6 times that of employed assets of working capital should be compared to the previous year’s data as well as other players in the industry to get a better sense. ![]()
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