CFA Practice Question

There are 534 practice questions for this study session.

CFA Practice Question

Using a 365-day year, if a firm has net annual sales of $250,000 and average receivables of $150,000, what is its average collection period?
A. 46.5 days
B. 219.0 days
C. 1.7 days
Explanation: Receivables turnover = $250,000/$150,000 = 1.66667

Collection period = 365/1.66667 = 219 days

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