Accounts Receivable Turnover
Formula:ART = Net Credit Sales / Average Accounts Receivable
Introduction to Accounts Receivable Turnover Calculator
The Accounts Receivable Turnover (ART) ratio measures how often a company collects its average accounts receivable and is an indicator of the efficiency with which a company manages and collects the credit it extends to customers. The formula for ART is ART = net credit sales divided by average accounts receivable. This measurement is typically made on an annual basis.
Parameter usage:
netCreditSales= The total amount of sales made on credit over a given period, usually one year.averageAccountsReceivable= The average amount of money owed by customers from credit sales, calculated by taking the sum of starting and ending accounts receivable over a period of time and dividing by two.
Example valid values:
netCreditSales= 15000averageAccountsReceivable= 3000
Output:
turnover= The number of times that the accounts receivable isTags: Finance, Ratio, Accounts Receivable, Liquidity