Receivables turnover ratio

Receivables turnover ratio

Total operating revenues divided by average receivables. Used to measure how effectively a firm is managing its accounts receivable.

Accounts Receivable Turnover

The average amount of time it takes for a business to collect on its accounts receivable. This is calculated by multiplying the amount in accounts receivable by the number of days in a given period and dividing into the total amount of credit sales. Accounts receivable turnover is a way to determine how a business' credit risk compares to that of its competitors.