Here is a receivables turnover calculator, which computes how quickly a company turns over its receivables, or sales extended on credit to customers. Enter the company's net credit sales (or, optionally, top line sales) and two period's accounts receivable to compute the ratio.
Accounts Receivable Turnover Calculator
What is the receivables turnover ratio?
The receivables turnover ratio is a liquidity ratio which measures how quickly and efficiently a company turns credit sales into cash. The canonical measure uses net credit sales (sales on credit netting out sales returns and allowances), but for companies which do most sales on credit using revenue will work decently as well.
The receivables turnover ratio is related to the average collection period, which estimates how long the weighted average customer takes to pay for goods or services.
Receivables Turnover Ratio Formula
The receivables turnover ratio formula is:
receivables\ turnover\ ratio=\frac{net\ credit\ sales}{average\ accounts\ receivable}Where:
- Net Credit Sales – Sales from credit, net of returns and allowances. Alternatively, substitute top-line revenue.
- Average Accounts Receivable – The average accounts receivable between the current period and the first period used to calculate the net credit sales (or revenue) above.
Other Liquidity Calculators
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