Accounts receivable turnover ratio

From CNM Wiki
Jump to: navigation, search

Accounts receivable turnover ratio (or, simply, accounts receivable turnover) is a ratio that indicates the number of times accounts receivable are converted to cash within a given period and the effectiveness of a company's credit policy.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Accounts receivable turnover ratio. A ratio that indicates the number of times accounts receivable are converted to cash within a given period and the effectiveness of a company's credit policy.

According to Managerial Accounting by Braun, Tietz (5th edition),

Accounts receivable turnover. Measures a company's ability to collect cash from credit customers. To compute accounts receivable turnover, divide net credit sales by average net accounts receivable.

Related concepts

Related lectures