all of the cfa material says the eqn is sales/avg receivables. i got a schweser vol 2 question wrong because i used total sales instead of credit sales in the numerator. Should the rule of thumb be: use total sales unless they break sales down into credit sales and cash sales components, in which case use credit sales in the numerator?
if they provide credit sales, then you use it otherwise total sales. Anyway, the correct method is using credit sales.
use credit sales brother
Use credit sales if it’s available for you. Usually isn’t if you are not a corporate insider though.