✖Net Sales are the number of sales generated by a company after the deduction of returns, allowances for damaged or missing goods, and any discounts allowed.ⓘ Net Sales [NS]			+10% -10%
✖Average Accounts Receivables is the sum of starting and ending accounts receivable over a time period (such as monthly or quarterly), divided by 2.ⓘ Average Accounts Receivables [AAR]			+10% -10%

✖Receivables Turnover Ratio is a simple metric that is used to measure how effective a business is at collecting debt and extending credit.ⓘ Receivables Turnover Ratio [RTR]

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Formula

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Receivables Turnover Ratio

Formula

`"RTR" = "NS"/"AAR"`

Example

`"7.2"="90000"/"12500"`

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Receivables Turnover Ratio Solution

STEP 0: Pre-Calculation Summary

Formula Used

Receivables Turnover Ratio = Net Sales/Average Accounts Receivables
RTR = NS/AAR
This formula uses 3 Variables

Variables Used

Receivables Turnover Ratio - Receivables Turnover Ratio is a simple metric that is used to measure how effective a business is at collecting debt and extending credit.
Net Sales - Net Sales are the number of sales generated by a company after the deduction of returns, allowances for damaged or missing goods, and any discounts allowed.
Average Accounts Receivables - Average Accounts Receivables is the sum of starting and ending accounts receivable over a time period (such as monthly or quarterly), divided by 2.

STEP 1: Convert Input(s) to Base Unit

Net Sales: 90000 --> No Conversion Required
Average Accounts Receivables: 12500 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

RTR = NS/AAR --> 90000/12500

Evaluating ... ...

RTR = 7.2

STEP 3: Convert Result to Output's Unit

7.2 --> No Conversion Required

FINAL ANSWER

7.2 <-- Receivables Turnover Ratio

(Calculation completed in 00.004 seconds)

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< 6 Operating and Turnover Ratios Calculators

Working Capital Turnover Ratio

Go Working Capital Turnover Ratio = (Net Sales/Average Working Capital)*100

Receivables Turnover Ratio

Go Receivables Turnover Ratio = Net Sales/Average Accounts Receivables

Fixed Asset Turnover Ratio

Go Fixed Asset Turnover Ratio = Net Sales/Average Net Fixed Assets

Inventory Turnover Ratio

Go Inventory Turnover Ratio = Cost of Goods Sold/Inventory

Capital Intensity

Go Capital Intensity = Total Average Assets/Revenue

Total Asset Turnover

Go Total Asset Turnover = Sales/Total Assets

< 22 Important Formulas of Financial Ratios Calculators

Fixed Charge Coverage Ratio

Go Fixed Charge Coverage Ratio = (Earnings Before Interest and Taxes+Fixed Charges Before Taxes)/(Fixed Charges Before Taxes+Interest)

Free Cash Flow to Firm

Go Free Cash Flow to Firm (FCFF) = Cash Flow from Operations+(Interest Expense*(1-Tax Rate))-Net Capital Expenditures

Economic Value Added

Go Economic Value Added = Net Operating Profit After Tax-Weighted Average Cost of Capital*Total Invested Capital

Average Collection Period

Go Average Collection Period = Accounts Receivable/(Sales for Reporting Period/Reporting Period Length)

Revenue Growth Rate

Go Revenue Growth Rate = ((Current Period Revenue-Previous Period Revenue)/Previous Period Revenue)*100

Sales Growth Rate

Go Sales Growth Rate = ((Current Period Sales-Previous Period Sales)/Previous Period Sales)*100

Business Quick Ratio

Go Quick Ratio = (Current Assets-Inventory of Liquidity Ratio)/Current Liabilities

Quick Ratio

Go Quick Ratio = (Current Assets-Inventory of Liquidity Ratio)/Current Liabilities

Interest Coverage Ratio

Go Interest Coverage Ratio = Earnings Before Interest and Taxes/Interest Expense

Debt to Equity Ratio

Go Debt to Equity (D/E) = Total Liabilities/Total Shareholders' Equity*100

Market Capitalization

Go Market Capitalization = Current Share Price*Total Shares Outstanding

Receivables Turnover Ratio

Go Receivables Turnover Ratio = Net Sales/Average Accounts Receivables

Free Cash Flow

Go Free Cash Flow = Cash Flow from Operations-Net Capital Expenditures

Fixed Asset Turnover Ratio

Go Fixed Asset Turnover Ratio = Net Sales/Average Net Fixed Assets

Equity Multiplier

Go Equity Multiplier = Total Assets/Total Shareholders' Equity

Inventory Turnover Ratio

Go Inventory Turnover Ratio = Cost of Goods Sold/Inventory

Sales to Receivables Ratio

Go Sales to Receivables Ratio = Net Sales/Net Receivables

Debt to Assets Ratio

Go Debt to Assets Ratio = Total Liabilities/Total Assets

Business Current Ratio

Go Current Ratio = Current Assets/Current Liabilities

Current Ratio

Go Current Ratio = Current Assets/Current Liabilities

Cash Flow to Sales

Go Cash Flow to Sales = Operating Cash Flow/Sales

Total Asset Turnover

Go Total Asset Turnover = Sales/Total Assets

Receivables Turnover Ratio Formula

Receivables Turnover Ratio = Net Sales/Average Accounts Receivables
RTR = NS/AAR

Receivables Turnover Ratio

Receivable turnover ratio measures the number of times a company collects its average accounts receivable balance in a specific time period.
It is a quantification of a company's effectiveness in collecting outstanding balances from clients and managing its line of credit process.
An efficient company has a higher accounts receivable turnover ratio while an inefficient company has a lower ratio. This metric is commonly used to compare companies within the same industry to gauge whether they are on par with their competitors.

How to Calculate Receivables Turnover Ratio?

Receivables Turnover Ratio calculator uses Receivables Turnover Ratio = Net Sales/Average Accounts Receivables to calculate the Receivables Turnover Ratio, The Receivables Turnover Ratio formula is defined as an efficiency ratio that measures how efficiently a company is collecting revenue and by extension, how efficiently it is using its assets. Receivables Turnover Ratio is denoted by RTR symbol.

How to calculate Receivables Turnover Ratio using this online calculator? To use this online calculator for Receivables Turnover Ratio, enter Net Sales (NS) & Average Accounts Receivables (AAR) and hit the calculate button. Here is how the Receivables Turnover Ratio calculation can be explained with given input values -> 7.2 = 90000/12500.

FAQ

What is Receivables Turnover Ratio?

The Receivables Turnover Ratio formula is defined as an efficiency ratio that measures how efficiently a company is collecting revenue and by extension, how efficiently it is using its assets and is represented as RTR = NS/AAR or Receivables Turnover Ratio = Net Sales/Average Accounts Receivables. Net Sales are the number of sales generated by a company after the deduction of returns, allowances for damaged or missing goods, and any discounts allowed & Average Accounts Receivables is the sum of starting and ending accounts receivable over a time period (such as monthly or quarterly), divided by 2.

How to calculate Receivables Turnover Ratio?

The Receivables Turnover Ratio formula is defined as an efficiency ratio that measures how efficiently a company is collecting revenue and by extension, how efficiently it is using its assets is calculated using Receivables Turnover Ratio = Net Sales/Average Accounts Receivables. To calculate Receivables Turnover Ratio, you need Net Sales (NS) & Average Accounts Receivables (AAR). With our tool, you need to enter the respective value for Net Sales & Average Accounts Receivables and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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