Accounts receivable turnover
January 25, 2023 ⚊ 1 Min read ⚊ Views 125 ⚊ FINANCE
The accounts receivables turnover ratio measures the number of times a company collects its average accounts receivable balance. 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.
Tags: Accounts Receivable, AI, AR, Order to Cash
