Company Ajax has the following information from its financial statements in 2021. The annual sales revenue was $271 million and we assume that the company operated for 365 days last year. The accounts receivable (AR) amounted to $31.8 million and the accounts payable (AP) to $33.2 million. Further from the balance sheet, the inventory is valued at $12.6 million. The cost of sales (COGS/Revenue) is 50%. counts receivable is Part Part 2 The average days of inventory is Part 3: The average days of accounts payable is [Select]
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
![Company Ajax has the following information from its financial statements
in 2021.
The annual sales revenue was $271 million and we assume that the
company operated for 365 days last year. The accounts receivable (AR)
amounted to $31.8 million and the accounts payable (AP) to $33.2
million. Further from the balance sheet, the inventory is valued at $12.6
million. The cost of sales (COGS/Revenue) is 50%.
Part
counts receivable is
Part 2. The average days of inventory is
Par
[Select]
Part 3: The average days of accounts payable is
[Select]](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F94318975-01ba-4d18-9ca1-9fd38cc18d5f%2F0e147823-2f7c-471a-aafc-034b65d8261b%2F44cmo65_processed.jpeg&w=3840&q=75)
Average days of accounts payable indicate the number of days the firm takes to repay the suppliers. It can be calculated by dividing accounts payable by the cost of goods sold and multiplying by the number of days.
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