GENERAL KNOWLEDGE

Detailed explanation-1: -Accounts Receivables Turnover ratio is also known as debtors turnover ratio. This indicates the number of times average debtors have been converted into cash during a year. This is also referred to as the efficiency ratio that measures the company’s ability to collect revenue.

Detailed explanation-2: -The accounts receivable turnover ratio is comprised of net credit sales and accounts receivable. A company can improve its ratio calculation by being more conscious of who it offers credit sales to in addition to deploying internal resources towards the collection of outstanding debts.

Detailed explanation-3: -The accounts receivable turnover ratio, also known as the debtor’s turnover ratio, is an efficiency ratio that measures how efficiently a company is collecting revenue – and by extension, how efficiently it is using its assets.

Detailed explanation-4: -Accounts Receivable (AR) Turnover Ratio Formula & Calculation. The AR Turnover Ratio is calculated by dividing net sales by average account receivables. Net sales is calculated as sales on credit-sales returns-sales allowances.