Accounts receivable (A/R) to sales ratio

Accounts receivable (A/R) to sales ratio,

Definition of Accounts receivable (A/R) to sales ratio:

  1. Money owed to a company by its debtors.

  2. Shows the relationship between unpaid sales and the total sales revenue. It is considered high if it is near to 1.0, because that means a significant amount of cash is tied up with the slow paying customers. Formula: Total accounts receivable (outstanding in an accounting period) ÷ sales revenue (in the same period).

How to use Accounts receivable (A/R) to sales ratio in a sentence?

  1. Another selling point is the companys current $310,000 in accounts receivable (with payables of about $130,000).

Meaning of Accounts receivable (A/R) to sales ratio & Accounts receivable (A/R) to sales ratio Definition