# Receivables Turnover Calculator

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Instructions:
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You can use this Receivables Turnover Calculator, by providing the Sales, the current accounts receivables and the previous accounts receivables in the form below:

## Receivables Turnover Calculator

More about the
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Receivables Turnover
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so you can better use the results provided by this finance calculator.

The Receivables Turnover is the ratio between sales and the average accounts receivables. This ratio is a measure of asset management, and it roughly indicates how many times a year a firm collects its outstanding credit accounts.

### How do you calculate the Receivables Turnover?

In order to calculate the Receivables Turnover, we use the following formula:

\[ \text{Receivables Turnover} = \displaystyle \frac{\text{Sales}}{\text{Average Accounts Receivables}}\]### More efficiency ratios and others

The Receivables Turnover is a broadly used financial ratio to measure efficiency in credit accounts management. We provide many other financial ratio calculators in our site, including our current ratio , quick ratio , our days' sales in receivables , and our inventory turnover calculator.

### Example of the calculation of receivables turnover

**Question**: Assume that a firm has sales for $10,000, and its current accounts receivable are $2,000, and the
previous accounts receivable were $2,500. Compute the receivables turnover for the firm.

Solution:

This is the information we have been provided with:

Sales = | \(10000\) |

Current Accounts Receivables = | \(\text{\textdollar}2000\) |

Previous Accounts Receivables = | \(\text{\textdollar}2500\) |

Hence, the Receivables Turnover is computed using the following formula:

\[ \begin{array}{ccl} \text{Receivables Turnover} & = & \displaystyle \frac{\text{Sales}}{\text{Average Accounts Receivables}} \\\\ \\\\ & = & \displaystyle \frac{\text{\textdollar}10000}{(\text{\textdollar}2000+\text{\textdollar}2500)/2} \\\\ \\\\ & = & \displaystyle \frac{\text{\textdollar}10000}{\text{\textdollar}2250} \\\\ \\\\ & = & 4.44 \end{array} \]Therefore, the receivables turnover is \(4.44\), for the given sales of \(\text{\textdollar}10000\), current accounts receivables of \(\text{\textdollar}2000\), and previous account receivables of \(\text{\textdollar}2500\). This means that firm turns its receivables over \(4.44\) times, or otherwise said, the firm collects its outstanding credit accounts \(4.44\) times a year.