Accounts Receivable Turnover Calculator
Compute accounts receivable turnover by dividing net credit sales by average accounts receivable.
CalcSimpler Examples
- 500000 sales and 62500 receivables ⇒ 8 times
- 200000 sales and 40000 receivables ⇒ 5 times
FAQ
What does a higher turnover indicate?
It suggests faster collection of receivables.
Should I use net or gross sales?
Use net credit sales excluding returns and allowances.
How often should turnover be calculated?
Typically each quarter or year for trend analysis.
Can accounts receivable be negative?
No, negative receivables would indicate an accounting error.
Additional Information
- Higher turnover ratios reflect quicker collection of receivables, with many firms aiming for 7–12 turns annually.
- Reviewing turnover trends over time helps evaluate credit policies and collection practices.
- Slow turnover can signal lenient terms or issues with customer payment behavior.
CalcSimpler