# Receivable Turnover Ratio Calculator

The receivables turnover ratio is equal to net credit sales(INR) divided average accounts receivables(INR).A company’s efficiency in providing credit.

The Formula us,

Receivables turnover ratio = net credit sales / average accounts receivables

let us consider,

• receivables turnover ratio shows how effective the company is at extending credit to its customers and how efficiently it gets paid back on a given day.
• net credit sales – revenue from goods or services sold on credit on a given day – to be paid at a later date.
• average accounts receivables – the claim to the money from previous credit sales that the business has yet to receive from customers.

average accounts receivables

Average accounts receivable is equal to accounts opening (INR)added accounts closing(INR) divided number of value 2.

average accounts receivables = (accounts opening + accounts closing) / 2,

let us consider,

• accounts opening or accounts receivables (opening) means the amount of outstanding receivables at the start of the day
• accounts closing or accounts receivables (closing) means the amount of outstanding receivables at the end of the day .

Calculate the average accounts receivables

Net credit sales are \$15000, your accounts opening is \$2000, and your accounts closing is \$3000.

average accounts receivables = (\$2000 + \$3000) / 2 = \$2500.

Calculate the receivables turnover ratio

Receivables turnover ratio = net credit sales / average accounts receivables

net credit sales (15000) , average accounts receivables (2500)

receivables turnover ratio = \$15000 / \$2500

The answer is receivable turnover ratio = 6.