Accounts receivable turnover and inventory turnover are two important ratios used by analysts to measure how efficiently a firm is paying its bills, collecting cash from customers, and turning ...

If the accounts receivable balance is increasing faster than sales are increasing, the ratio goes down. The two main causes of a declining ratio are changes to the company's credit policy and ...

By definition, the accounts receivable ratio is the average amount of time it takes a company to collect on its credit sales. If a business has an annual average of $40,000 worth of credit sales ...

An asset utilization ratio that is used to determine how well a company collects receivables and short term IOU’s from customers. The accounts receivable turnover ratio is calculated by dividing ...

For an example of how this calculation works, consider a company with $50,000 in cash, $20,000 in marketable securities, $30,000 in accounts receivable and $80,000 in current liabilities.

Reviewed by Eric Estevez Accounts receivable turnover and inventory turnover are two important ratios used by analysts to measure how efficiently a firm is paying its bills, collecting cash from ...