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)

Credits

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Created by Vishnu K
BMS College of Engineering (BMSCE), Bangalore
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Free Cash Flow
​ LaTeX ​ Go Free Cash Flow = Cash Flow from Operations-Net Capital Expenditures
Debt to Assets Ratio
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Receivables Turnover Ratio Formula

​LaTeX ​Go
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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