The receivable turnover amount is needed to calculate the
A) inventory turnover.
B) days' sales uncollected.
C) days' inventory on hand.
D) interest coverage ratio.

Question

Quizplus · Accepted Answer

The receivable turnover ratio (calculated as net credit sales divided by average accounts receivable) is used to measure how efficiently a company collects its accounts receivable. The result of this calculation is used to calculate the days' sales uncollected, which is the average length of time it takes for a company to collect payments from its customers.

The Receivable Turnover Amount Is Needed to Calculate the