CFA CFA General Receivables Turnover Question

Receivables Turnover Question

  • This topic has 2 replies, 2 voices, and was last updated Jan-18 by Stuj79.
  • Author
    Posts
    • jatrigg1
      Participant
      Up
      0
      Down

      Begining Acct. Receivables was 32, Ending Account Receivables was 25, Cash Collections was 30. All sales were made on credit, please calculate the receivables turnover ration.

    • Stuj79
      Participant
      Up
      3
      Down

      I may be missing something here but my understanding is that we require the figure for “purchases” to calculate the receivables turnover given average accounts receivable.

      Receivables turnover is purchases divided by average receivables.

      Purchases can be calculated using COGS, ending inventory and beginning inventory. I’m not sure we are able to calculate receivables without this information….

      Where is this question taken from?

    • Stuj79
      Participant
      Up
      4
      Down

      Sorry I meant “net credit sales” rather than “purchases”….you say all sales were made on credit but don’t provide a figure. The cash collected of 30 can’t be credit sales as, well…..its cash.

      In my opinion to calculate receivables turnover we need a figure for net credit sales

Viewing 2 reply threads
  • You must be logged in to reply to this topic.