Free Receivables Turnover Calculator
Calculate accounts receivable turnover and average collection period to evaluate how efficiently a company collects payment from customers.
Receivables Turnover
10.00
Receivables Turnover vs Net Credit Sales
How to Calculate Receivables Turnover
Formula
Receivables Turnover = Net Credit Sales / Average Accounts Receivable Average Collection Period = 365 / Receivables Turnover
This ratio measures how many times per year a company collects its average receivables balance. A higher number indicates faster collection. The average collection period converts the ratio into days, giving you a concrete sense of how long customers take to pay their invoices.
Example Calculation
A company had $800,000 in net credit sales. Accounts receivable were $60,000 at the start and $100,000 at the end.
- 01Average AR = ($60,000 + $100,000) / 2 = $80,000
- 02Receivables Turnover = $800,000 / $80,000 = 10.0
- 03Average Collection Period = 365 / 10 = 36.5 days
Frequently Asked Questions
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