The Formula to Calculate Receivables (Debtors) Turnover in Times Per

question 58

Multiple Choice

The formula to calculate receivables (debtors) turnover in times per annum is:

• A) 365 divided by net sales
• B) Net sales revenue divided by total assets
• C) Net sales revenue divided by average receivables balance
• D) Average receivables balance divided by net sales revenue

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Definitions:

Pareto's Law

Also known as the 80/20 rule, it states that for many events, roughly 80% of the effects come from 20% of the causes, applicable in various contexts including economics and business.

Batching Economies

Cost advantages gained by producing or purchasing goods in large quantities at once.

Cycle Stocks

Inventory that companies hold to meet normal sales demand, as opposed to inventory held in anticipation of peak demand or for buffering against supply chain uncertainties.

Ordering Cost

The expenses associated with placing and receiving orders for materials, including costs related to paperwork, communication, and transportation.