accounts receivable turnover

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Accounts receivable turnover

The ratio of net credit sales to average accounts receivable, which is a measure of how quickly customers pay their bills.
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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.
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accounts receivable turnover

The number of times in each accounting period that a firm converts credit sales into cash. A high turnover indicates effective granting of credit and collection from customers by the firm's management. Accounts receivable turnover is calculated by dividing the average amount of receivables into annual credit sales. Also called receivables turnover. See also activity ratio, collection period.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
Table 5 shows the results of the robust regressions that explain firms' receivables turnover ratios by firm characteristics, the medium and the heavy industry dummies, the time variable, the "Contractionary" dummy, and the Leverage *Contractionary interaction term.
This would lead to a lowered EV for sales and cost of sales as well as lowered inventory and receivables turnover ratios. If book values (BVs) for sales and cost of sales are close to last year's AVs adjusted for the expected changes due to the shortage, the auditor might accept the book values without detailed auditing.