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Answer :
Final answer:
The receivables turnover for Benton, Incorporated is 15.21, which means the company collects its average accounts receivable about 15 times per year.
Explanation:
The question refers to the calculation of the receivables turnover for Benton, Incorporated. This ratio measures how many times, on average, a company collects its average accounts receivable during a period. It is used to assess the effectiveness of the company's credit and collection efforts.
The formula to calculate receivables turnover is:
Total Sales / Average Accounts Receivable.
However, in your case, you are given the information in a different way - average collection period and average daily investment in receivables - and you are to find the receivables turnover.
So, we need to adjust the formula a bit accordingly:
Receivables Turnover = 365 / Average Collection Period
Let's plug the values in:
Receivables Turnover = 365 / 24 = 15.21
This means Benton Incorporated collects its receivables 15.21 times per year on average.
Learn more about Receivables Turnover here:
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