Receivables Turnover Ratio Calculator







Formulas

The formulas used in the calculations are:

\[ \text{average accounts receivables} = \frac{\text{opening accounts receivables} + \text{closing accounts receivables}}{2} \]

\[ \text{receivables turnover ratio} = \frac{\text{net credit sales}}{\text{average accounts receivables}} \]

Description

This calculator computes the receivables turnover ratio based on the input values of net credit sales, opening accounts receivables, and closing accounts receivables. The receivables turnover ratio measures how efficiently a company collects its accounts receivables and is an important indicator of financial health.

Example Calculation

Let's assume the following:

Calculate the Average Accounts Receivables:

\[ \text{average accounts receivables} = \frac{2,000 + 3,000}{2} = 2,500 \]

Calculate the Receivables Turnover Ratio:

\[ \text{receivables turnover ratio} = \frac{15,000}{2,500} = 6 \]

Therefore, the Receivables Turnover Ratio is 6.