Overview
Receivables turnover measures how quickly sales convert into collected cash.
Formula
Receivables Turnover = Revenue / Average Accounts Receivable
How to Interpret
High Value
A high ratio can indicate faster collections and better credit discipline.
Low Value
A low ratio may signal slower collections or customer credit risk.
Where It Is Used
Interpreting Receivables Turnover with company-specific distribution ranges is usually more stable than relying only on sector average.