Given the information below, answer questions from #29 to #33. Accounts Receivable $20,000 ($30,000 in the previous year) Total Current Assets $300,000 Investments $50,000 Total Assets $1,000,000 Total Current Liabilities $100,000 Total Long-Term Debt $400,000 Total Liabilities $500,000 Net Income $300,000 Total Revenue (Sales) $900,000 Industry average: Current ratio 1 Industry average: Solvency ratio 2.5 Industry average: Profit margin ratio 35% What is the Accounts Receivable Turnover (ART) ratio of this company?
Given the information below, answer questions from #29 to #33. Accounts Receivable $20,000 ($30,000 in the previous year) Total Current Assets $300,000 Investments $50,000 Total Assets $1,000,000 Total Current Liabilities $100,000 Total Long-Term Debt $400,000 Total Liabilities $500,000 Net Income $300,000 Total Revenue (Sales) $900,000 Industry average: Current ratio 1 Industry average: Solvency ratio 2.5 Industry average: Profit margin ratio 35% What is the Accounts Receivable Turnover (ART) ratio of this company?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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- Given the information below, answer questions from #29 to #33.
| $20,000 ($30,000 in the previous year) | |
| Total Current Assets | $300,000 |
| Investments | $50,000 |
| Total Assets | $1,000,000 |
| Total Current Liabilities | $100,000 |
| Total Long-Term Debt | $400,000 |
| Total Liabilities | $500,000 |
| Net Income | $300,000 |
| Total Revenue (Sales) | $900,000 |
| Industry average: |
1 |
| Industry average: Solvency ratio | 2.5 |
| Industry average: Profit margin ratio | 35% |
What is the Accounts Receivable Turnover (ART) ratio of this company?
Expert Solution
Step 1
The accounts receivable turnover ratio states the company's ability to collect the accounts receivable. It shows the number of times the entity collects the average accounts receivable.
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