Receivables Turnover = Net Credit Sales / Average Accounts Receivable
How do you know what is a product sold on credit rather than sold for cash in the accounts?
Am I safe to use revenue or sales as a proxy for net credit sales? Or should I be looking elsewhere in the accounts?
Also, part 2:
If when calculating ratios, average = beginning - end
If B<E, then you will end up with a negative number which will impact the ratio?
Does it always have to be B-E, or can you do E-B?
Thank you very much!