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How to calculate your accounts receivable turnover ratio?

How to calculate accounts receivable turnover Run an income statement. Your first step to calculating your accounts receivable turnover is to obtain your net sales for the year. Run a balance sheet. In order to complete the next step, which is calculating your average accounts receivable balance, you will need to run a balance sheet. Calculate your average accounts receivable balance. ... More items...

How do you calculate Accounts Receivable Turnover Ratio?

Accounts receivable turnover is calculated by dividing net credit sales by the average accounts receivable for that period. The reason net credit sales are used instead of net sales is that cash sales don’t create receivables.

What is the formula for calculating accounts receivable?

Accounts receivable turnover is calculated using the following formula: We can obtain the net credit sales figure from the income statement of a company. Average accounts receivable figure may be calculated simply by dividing the sum of beginning and ending accounts receivable by 2.

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