Accounts receivable (A/R) to sales ratio,
Definition of Accounts receivable (A/R) to sales ratio:
Money owed to a company by its debtors.
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?
- 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