Keyword Analysis & Research: receivable turnover ratio

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What does a high receivables turnover ratio indicate?

A high accounts receivables turnover ratio can indicate that the company is conservative about extending credit to customers and is efficient or aggressive with its collection practices. It can also mean the company's customers are of high quality, and/or it runs on a cash basis. Not all of those things are necessarily good, however.

How does Accounts Receivable Turnover ratio affect a company?

How Does Accounts Receivable Turnover Affect a Company? Trapped Cash. Since accounts receivable represents money your company is owed for goods you've already delivered or services you've already performed, it really is your money -- you just can't ... Turnover Formula. Accounts receivable turnover measures how quickly you're collecting on outstanding A/R. ... More Turns. ... Interpretation. ...

What does Accounts Receivable Turnover ratio indicate?

The accounts receivable turnover ratio indicates how many times, on average, accounts receivables are collected during a year. The ratio evaluates the ability of a company to efficiently issue a credit to its customers and collect funds from them in a timely manner.


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