Accounts Receivable Turnover Ratio Template
Accounts Receivable Turnover Ratio Template
This Accounts Receivable Turnover Ratio Template will show you how to calculate receivable turnover ratio and receivable turnover in days.
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What is the Accounts Receivable Turnover Ratio?
The accounts receivable turnover ratio, also known as the debtor’s turnover ratio, is an efficiency ratio that measures how efficiently a company is using its assets. The accounts receivable turnover ratio measures the number of times over a given period that a company collects its average accounts receivable.
Accounts Receivable Turnover Ratio Formula
The accounts receivable turnover ratio formula is as follows:
Accounts Receivable Turnover Ratio = Net Credit Sales / Average Accounts Receivable
Where:
- Net credit sales are sales where the cash is collected at a later date. The formula for net credit sales is = Sales on credit – Sales returns – Sales allowances.
- Average accounts receivable is the sum of starting and ending accounts receivable over a time period (such as monthly or quarterly), divided by 2.
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Analyst Certification FMVA® Program
Below is a break down of subject weightings in the FMVA® financial analyst program. As you can see there is a heavy focus on financial modeling, finance, Excel, business valuation, budgeting/forecasting, PowerPoint presentations, accounting and business strategy.
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Additional Questions & Answers
CFI is the global institution behind the financial modeling and valuation analyst FMVA® Designation. CFI is on a mission to enable anyone to be a great financial analyst and have a great career path. In order to help you advance your career, CFI has compiled many resources to assist you along the path.
In order to become a great financial analyst, here are some more questions and answers for you to discover:
- What is financial modeling?
- How do you build a DCF model?
- What is sensitivity analysis?
- How do you value a business?
