How to compute the accounts receivable turnover


A condensed balance sheet for Bradford Corporation prepared at the end of the year appears as follows:

  • Assets Liabilities & Stockholders' Equity
  • Cash $ 95,000 Notes payable (due in 6 months) $ 40,000
  • Accounts receivable 155,000 Accounts payable 110,000
  • Inventory 270,000 Long-term liabilities 360,000
  • Prepaid expenses 60,000 Capital stock, $5 par 300,000
  • Plant & equipment (net) 570,000 Retained earnings 430,000
  • Other assets 90,000

Total $ 1,240,000 Total $ 1,240,000

During the year the company earned a gross profit of $1,116,000 on sales of $2,950,000. Accounts receivable, inventory, and plant assets remained almost constant in amount throughout the year.

a. Compute the current ratio. (Round your answer to 1 decimal place.) Current ratio
b. Compute the quick ratio. (Round your answer to 1 decimal place.) Quick ratio
c. Compute the working capital. (Omit the "$" sign in your response.) Working capital $
d. Compute the debt ratio.(Round your answer to the nearest whole percent. Omit the "%" sign in your response.)
Debt ratio %

e. Compute the accounts receivable turnover (all sales were on credit). Accounts receivable turnover times
f. Compute the inventory turnover. (Round your answer to 1 decimal place.) Inventory turnover times
g. Compute the book value per share of capital stock. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Book value per share of capital stock $

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Accounting Basics: How to compute the accounts receivable turnover
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