Glossary -> Accounts receivable turnover ratio
Accounts Receivable Turnover Ratio
The accounts receivable turnover ratio is calculated as
total credit sales in the
year
average accounts receivable
Average accounts receivable can be determined 2 different ways:
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If this ratio decreases from one year to the next, it means the company is taking longer to collect from its customers. If the ratio increases, the company is collecting from its customers more quickly.
See also aged accounts receivable and day's sales outstanding.
Revised: October 26, 2023