Twist Corp. has a current accounts receivable balance of $328,800. Credit sales for the year just...

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Accounts Receivable = $328,800

Credit sales for the year just ended = $4,192,200

What is the company's receivables turnover?

Accounts Receivable Turnover = Net Credit Sales/ Accounts Receivables

Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â = $4,192,200 / $328,800

Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â = 12.75 Times.

What is the company's days' sales in receivables?

Days Sales in Receivables = Accounts Receivables / Net Credit Sales * 365

Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â = $328,800 / $4,192,200 * 365

Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â = 28.62 Times

How long did it take on average for credit customers to pay off their accounts during the past year?

Average Collection Period = Accounts Receivables/ Net Credit Sales * 365

Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â = $328,800 / $4,192,200 * 365

Â Â = 28.62 Times

Note : Based on 365 Days in Year

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