Formula To Calculate Receivables Turnover Ratio :

The receivables turnover ratio measures the efficiency (how quickly) with which a company collects on its receivables.

To calculate the Receivables Turnover Ratio(financial), use the following formula

Receivables Turnover Ratio = Net Credit Sales / Average Accounts Receivable

Example :

Company XYZ has net credit sales of $1,000 and average accounts receivable of $1,500.

Receivables Turnover Ratio = $1,000 / $1,500 = 0.67