What is Accounts Receivable Turnover?
Cfefinances
Accounts Receivable Turnover is a ratio that measures how many times a company converts its receivables into cash over a year. It is calculated as Net Annual Sales divided by Average Net Accounts Receivable. A higher turnover generally indicates more efficient collection.
Think about how quickly a company collects the money its customers owe. Picture dividing yearly sales by the average amount still owed — a higher number means faster collection.