Free Accounts Receivable Turnover Calculator

Accounts receivable turnover is a key financial metric that shows how well a company can collect payments that are still due. 

It’s a ratio that provides a quick snapshot of the company’s financial health and how well it manages its credit sales. 

What is Accounts Receivable Turnover?

Accounts receivable turnover is a financial ratio that shows how many times a company collects its average accounts receivable in a given time period. 

Accounts receivable are the amounts of money that customers who bought goods or services on credit owe a business. 

The ratio is determined by dividing the company’s net credit sales by its average accounts receivable.

What Does Accounts Receivable Turnover Indicate?

A high accounts receivable turnover indicates that a company is effectively managing its credit sales and collecting outstanding payments. 

On the other hand, a low turnover ratio indicates that the company is having difficulty collecting payments and may be having difficulty managing its credit sales. 

A high ratio is generally regarded as positive and indicates a solid financial position, whereas a low ratio may indicate financial distress and the need for better credit management.

What is the Accounts Receivable Turnover Calculator?

The accounts receivable turnover calculator is a tool that helps you figure out how many times a company collects its average accounts receivable during a certain time period. 

When you put in the company’s net credit sales and average accounts receivable, the calculator gives you the accounts receivable turnover ratio.

How Does the Accounts Receivable Turnover Calculator Work?

The accounts receivable turnover calculator calculates the company’s net credit sales by dividing them by the average accounts receivable. 

To use the calculator, enter the following information: 

Net credit sales: The total amount of money the company received from credit sales during a given period.

Average accounts receivable: The average amount of money owed by customers to the company for goods or services purchased on credit during a given period.

After you put in the required information, the calculator will give you the accounts receivable turnover ratio, which is the number of times the company collected its average accounts receivable during the given period.

Advantages of Using Our Accounts Receivable Turnover Calculator

Using our accounts receivable turnover calculator gives you a number of advantages, such as:

• Quick and easy calculation: With our calculator, you can quickly and easily figure out the accounts receivable turnover ratio, saving you time and effort.

• Better decision-making: The accounts receivable turnover ratio tells you important things about a company’s financial health and how well it manages credit, so you can make decisions that are more informed.

• Increased accuracy: Our calculator is made to give you accurate and reliable results, reducing the chance of mistakes and making sure you have the right information at your fingertips.

Accounts Receivable Turnover Formula

The formula for calculating the accounts receivable turnover ratio is:

Accounts Receivable Turnover = Net Credit Sales / Average Accounts Receivable

Example

Suppose a company had $100,000 in net credit sales and $20,000 in average accounts receivable during a given period. 

We can calculate the accounts receivable turnover using the formula:

Accounts Receivable Turnover = $100,000 / $20,000 = 5 times

This result shows that the company collected its average accounts receivable 5 times during the specified time period, which is strong performance and indicates effective credit management.

How to Use Our Accounts Receivable Turnover Calculator

It is simple and straightforward to use our accounts receivable turnover calculator. To begin, follow these steps:

1. Input net credit sales: Enter the total amount of money received from credit sales by the company during a given period.
2. Input average accounts receivable: Enter the average amount of money owed by customers to the company for goods or services purchased on credit during a given period.
3. Get the result: The calculator will automatically calculate and display the accounts receivable turnover ratio.

In conclusion, the accounts receivable turnover ratio is a key metric that shows a lot about a company’s financial health and how well it manages credit.

Using our accounts receivable turnover calculator, you can figure out the ratio quickly and easily so you can make smart decisions.

Try it today to take your financial analysis to the next level.