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How do you calculate AR turnover?

Updated: 9/15/2023
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15y ago

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You divide gross annual sales by A/R. The result shows how often per year your A/R turn. For example, if you have sales of $1000 and A/R of $100, the answer suggests that your A/R turn 10x.

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15y ago
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Q: How do you calculate AR turnover?
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Do you use net receivable in calculating AR turnover?

The equation for AR Turnover is: AR Turnover = Net Credit Sales / Average AR (/=divided by) Some companies' will report only sales, however this can affect the ratio depending on the amount of cash sales.


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How do you calculate accounts receivable days outstanding?

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