# Receivables Turnover Ratio Calculator

###### Updated: Jun 10, 2018

Receivables Turnover Ratio Calculator is to measure Receivables Turnover Ratio and measures how efficiently a firm uses its assets

Receivables Turnover Ratio:
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#### Background Information

What does Receivables Turnover Ratio mean?
The receivables turnover ratio is an accounting measure used to quantify a companyâ€™s effectiveness in extending credit and in collecting debts on that credit.
Formula
Receivables Turnover Ratio = Net Annual Credit Sales Ã· ((Beginning Accounts Receivable + Ending Accounts Receivable) / 2)
Example

The beginning accounts receivable balance for a firm is $316,000 and the ending balance$384,000. Net credit sales for the last 12 months were $3,500,000. According, to the formula, Receivables Turnover Ratio is:- •$3,500,000 Net credit sales Ã· (($316,000 Beginning receivables +$384,000 Ending receivables) / 2)
• = $3,500,000 Net credit sales Ã·$350,000 Average accounts receivable
• = 10.0

## Comments

### History

Jun 10, 2018
Tool Launched

Created: Jun 10, 2018
Online Tool Designed For: Windows, OS X, Android, iOS, Linux