Debtors Turnover Ratio Calculator

Formula

To calculate the Debtors Turnover Ratio (DTR):

\[ DTR = \frac{NCS}{AAR} \]

Where:

\(DTR\) is the debtors turnover ratio
\(NCS\) is the net credit sales
\(AAR\) is the average accounts receivable

What is Debtors Turnover Ratio?

The debtors turnover ratio, also known as the accounts receivable turnover ratio, measures how efficiently a company collects its accounts receivable. It is calculated by dividing the net credit sales by the average accounts receivable[^1^][^2^].

Example Calculation 1

Let's assume the following values:

Net Credit Sales = 500,000
Average Accounts Receivable = 100,000

Using the formula:

\[ DTR = \frac{500,000}{100,000} = 5.00 \]

The debtors turnover ratio is 5.00.

Example Calculation 2

Let's assume the following values:

Net Credit Sales = 750,000
Average Accounts Receivable = 150,000

Using the formula:

\[ DTR = \frac{750,000}{150,000} = 5.00 \]

The debtors turnover ratio is 5.00.