Accounts receivable (A/R) turnover

Accounts receivable (A/R) turnover,

Definition of Accounts receivable (A/R) turnover:

  1. 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.

  2. Money owed to a company by its debtors.

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

  1. 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.
  2. 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.
  3. 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.
  4. 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