Receivables Turnover Ratio, also known as accounts receivable turnover ratio, indicates how many times during the reporting period the accounts receivable (outstanding invoices from customers) is collected. It is calculated as:
$$Receivables\; Turnover\; Ratio \mmlToken{mo}[linebreak="auto"]{=} \frac{Revenue}{Average\; Accounts\; Receivable}$$
The receivables turnover ratio can be used to derive the average receivables conversion period.
Receivables Turnover FAQ
What is receivables turnover?
It measures how many times receivables are collected during a period.
How do you calculate receivables turnover ratio?
Divide revenue by average accounts receivable.
