Accounts Receivable Turnover Ratio Calculator

Calculate Accounts Receivable Turnover Ratio



Formula

To calculate the Accounts Receivable Turnover Ratio (\(ART\)):

\[ ART = \frac{NCS}{AR} \]

Where:

What is Accounts Receivable Turnover Ratio?

An accounts receivable turnover ratio is defined as the ratio of net credit sales to average accounts receivable. It measures how efficiently a company collects its receivables or how well the company manages the credit it extends to customers.

Example Calculation 1

Let's assume the following values:

Using the formula:

\[ ART = \frac{500000}{50000} = 10 \]

The Accounts Receivable Turnover Ratio is 10.

Example Calculation 2

Let's assume the following values:

Using the formula:

\[ ART = \frac{300000}{75000} = 4 \]

The Accounts Receivable Turnover Ratio is 4.