The formulas used in the calculations are:
\[ \text{average accounts receivables} = \frac{\text{opening accounts receivables} + \text{closing accounts receivables}}{2} \]
\[ \text{receivables turnover ratio} = \frac{\text{net credit sales}}{\text{average accounts receivables}} \]
This calculator computes the receivables turnover ratio based on the input values of net credit sales, opening accounts receivables, and closing accounts receivables. The receivables turnover ratio measures how efficiently a company collects its accounts receivables and is an important indicator of financial health.
Let's assume the following:
Calculate the Average Accounts Receivables:
\[ \text{average accounts receivables} = \frac{2,000 + 3,000}{2} = 2,500 \]
Calculate the Receivables Turnover Ratio:
\[ \text{receivables turnover ratio} = \frac{15,000}{2,500} = 6 \]
Therefore, the Receivables Turnover Ratio is 6.