Accounts receivable (A/R) turnover,
Definition of Accounts receivable (A/R) turnover:
Ratio that shows the relationship between unpaid credit sales to total credit sales. It indicates, in general, the effectiveness (or lack of it) of a firms credit policies and cash collection efforts. Formula: Outstanding accounts receivable (in an accounting period) ÷ credit sales revenue (in the same period). Also called receivable turnover.
Money owed to a company by its debtors.
How to use Accounts receivable (A/R) turnover in a sentence?
- Although the business did not have much liquid assets, they were approved for the loan because the accounts receivable turnover was deemed sufficient for the terms and conditions.
- The accounts receivable turnover was poor because we would send our invoices with the NET 30 terms but we could say nothing if clients paid in 90 days.
- I recently was denied receivables financing by bank due to their concerns about the average duration of outstanding invoices as measure by my accounts receivable turnover ration.
- Another selling point is the companys current $310,000 in accounts receivable (with payables of about $130,000).
Meaning of Accounts receivable (A/R) turnover & Accounts receivable (A/R) turnover Definition