Question
Asked Jun 5, 2019

If I were to have accounts receivable in the millions and were $ 74 million at the beginning of year one. How do I compute the accounts receivable turnover for year2 and 1 and what does it mean by rounding to two decimal places? What part do I round off?

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Step 1

Accounts receivable turnover: This is the ratio which analyzes the number of times accounts receivables is collected and converted into cash during the period. This ratio gauges the efficacy of collecting receivables. Larger the ratio, more efficient in collecting receivables.

Formula for accounts receivable turnover:

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Step 2

Computation of accounts receivable turnover for Year 2:

Compu...

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