Activity Ratios: Inventory Turnover, Receivable Turnover, Payable Turnover

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  • #3123645
    jasonch91
    Participant

    Hello,

    I was watching the BEC Sparring lecture on “Performance Measures” and Mike (the host) mentions (26:20 mark) that the turnover ratios have been updated sucH that the calculation now uses ending balance instead of the average balance (e.i. Receivable turnover = net credit sales/ENDING receivables) I am confused now because the ninja study materials and mc questions applies calculation using average balance. Is this change effective this year on the actual exams?

    Thanks,

    Jason

    #3125937
    CPAHOPE
    Participant

    Seriously? Why would they make this change? Since B/S accounts are permanent and accumulate, it makes more logical sense to use the avg instead of ending balance.

    AUD - 39
    BEC - 76
    FAR - 56
    REG - 79
    FAR 57,61,57,56 (F*)

    REG 54,49,69,66, 79

    AUD 39(lol)

    BEC 64,60,50(lol),70,67,71,76

    "Theres no limit unless you allow it"

    "Why not?"

    "I dont believe in limits"

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