Question

Suppose the 2022 financial statements of 3M Company report net sales of $23.1 billion. Accounts receivable (net) are $3.2 billion at the beginning of the year and $3.25 billion at the end of the year. Compute 3M’s accounts receivable turnover. (Round answer to 1 decimal place, e.g. 12.5.) Accounts receivable turnover ratio enter the accounts receivable turnover ratio in times rounded to 1 decimal place times

Answer 1

Answer:

7.16 times

Explanation:

Average accounts receivable:

= (Beginning accounts receivable + Ending accounts receivable) ÷ 2

= ($3.2 billion + $3.25 billion) ÷ 2

= $3.225 billion

Accounts Receivable turnover ratio:

= Net annual credit sale ÷ Average accounts receivable

= $23.1 billion ÷ $3.225 billion

= 7.16 times

Therefore, the Accounts receivable turnover ratio is 7.16 times.