Accounts receivable turnover ratio is a ratio that measures how many times a business can collect its average accounts receivable during the year. It helps to evaluate how efficiently a company is collecting revenue from its customers and using its assets. The formula for accounts receivable turnover ratio is:
Accounts receivable turnover ratio = Trailing 12 Month Sales / Average Account Receivable
Where:
- Trailing 12 Month Sales is TM006,
ttm_net_sales
- Average Account Receivable is the average of the beginning balance and ending balance of BS004,
bs_acct_note_rcv