What is the formula for receivables (debtors) turnover in times per annum?
A) Net sales revenue/average receivables balance
B) Average receivables balance/net sales revenue
C) 365/net sales
D) Net sales revenue/total assets

Question

Quizplus · Accepted Answer

The formula for receivables (debtors) turnover in times per annum is net sales revenue divided by average receivables balance. This ratio shows how many times a company is able to collect its average accounts receivable balance during the year. A higher ratio indicates that a company is collecting its outstanding debts more quickly, which is generally considered favorable. Therefore, option A is the correct choice.

What Is the Formula for Receivables (Debtors) Turnover in Times