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The equation for AR Turnover is:

AR Turnover = Net Credit Sales / Average AR

(/=divided by)

Some companies' will report only sales, however this can affect the ratio depending on the amount of cash sales.

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What will acceleration in the collection of receivables tend to cause the accounts receivable turnover to do?

Acceleration in the collection of receivables will tend to cause the accounts receivable turnover to increase. Many companies use collection agencies to help them with this process.


When calculating your monthly income on the bankrupsy means test do you use your gross or net income?

Gross.


How do you set up the allowance for doubtful accounts?

Allowance for doubtful account is set up based on past experiance of uncollectibility of account receivable. There are two approach in calculating it. firstly based on net credit sales which calculate how much % of net credit sales in the past became uncollectible. secondly based on Account receivable balance which calculate how much % of AR balnce became uncollectible. the asumption here is what happened in the past wil occure repeatly in the future. normally companies using aging schedule. But it is better to use credit rating of our customer to estimate the uncolletible account.


What is monthly turnover?

Monthly turnover refers to monthly change. It can be associated with employee turnover or inventory turnover. Managers may use the term to refer to other things as well.


Why Auditors prefer to use before tax net earnings instead of after tax net earnings?

Most auditors prefer to use before-tax net earnings instead of after-tax net earnings when calculating materiality based on income statement chiefly because it eliminates the impact of external influences (ie. Changes in tax laws, changes in the tax rates etc.) that could have a significant impact on a company`s net earnings and subsequently the net income materiality base.

Related Questions

What will acceleration in the collection of receivables tend to cause the accounts receivable turnover to do?

Acceleration in the collection of receivables will tend to cause the accounts receivable turnover to increase. Many companies use collection agencies to help them with this process.


How use the word net in a sentence?

The net caught the ball. The business recorded a net profit after calculating losses and assets.


When calculating your monthly income on the bankrupsy means test do you use your gross or net income?

Gross.


What do you not use in calculating acceleration?

When calculating acceleration, you do not use the object's mass. Acceleration is determined by the net force acting on an object and its mass, according to Newton's second law of motion.


How do you use turnover in a sentence?

The use of biochemical markers of bone turnover in osteoporosis.


How do you set up the allowance for doubtful accounts?

Allowance for doubtful account is set up based on past experiance of uncollectibility of account receivable. There are two approach in calculating it. firstly based on net credit sales which calculate how much % of net credit sales in the past became uncollectible. secondly based on Account receivable balance which calculate how much % of AR balnce became uncollectible. the asumption here is what happened in the past wil occure repeatly in the future. normally companies using aging schedule. But it is better to use credit rating of our customer to estimate the uncolletible account.


What is its profit margin if a company has total assets turnover 1.5 roe5 percent and roa 3 percent?

To find the profit margin, we can use the relationship between Return on Assets (ROA), Return on Equity (ROE), and Total Assets Turnover. ROA is calculated as Net Income divided by Total Assets, while Total Assets Turnover is Net Sales divided by Total Assets. Given ROA of 3% and Total Assets Turnover of 1.5, we can express the profit margin as follows: Profit Margin = ROA / Total Assets Turnover = 3% / 1.5 = 2%. Thus, the profit margin for the company is 2%.


What is meant by the terms margin and turnover in ROI calculations?

Margin and turnover in ROI calculations: Margin: In ROI calculation margin is the ratio of net operating income to total sales. Turnover: In ROI calculation turnover means the ratio of total sales to average operating assets. Operating assets include cash, A/R, inventory, PP&E, and so on. Land held for future use, leases, and investments do not count.


What is monthly turnover?

Monthly turnover refers to monthly change. It can be associated with employee turnover or inventory turnover. Managers may use the term to refer to other things as well.


How do use word Turn over in a sentence?

I would prefer an apple turnover, please. On second thought, make that a cherry turnover. Ooh, is that the LAST turnover?


How do you measure net use?

Net use can be measured by calculating the difference between the total amount of resources consumed and the total amount of resources produced or saved. This can be calculated in various ways, such as tracking energy consumption versus energy production or measuring the amount of materials used compared to the amount recycled or reused. Net use provides a metric to assess efficiency and sustainability in resource management.


How do you calculate net profit percentage?

{Revenues-(Cost of Goods Sold+Operating Expenses+Other Expenses+Interest+Tax and Non Tax Expenses-Tax and Non Tax Income)/Revenues}*100 Or to put it simpler, you could use the equation; (net profit/turnover)*100