Accounts receivable turnover - Definition

It is a method used in Accounting to calculate how effective a firm is in collecting debts and increasing credit.

The formula used to get the average duration of receivables Turnover is:
Net Credit Sale --- Account Receivable Turnover= ---------------------------

Average Account Receivable
A high ratio of account receivable turnover means that either that a company operates on a cash Basis or that its extension of credit and collection of Accounts receivable is well-organized.

Terms near "Accounts receivable turnover"

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