Accounts Receivable Turnover Calculator

The accounts receivable turnover, sometimes referred to as the receivables turnover ratio, is an activity ratio and measures the number of times the accounts receivable was collected during an accounting period or looked at another way, the number of times the accounts receivable was converted into cash.

The value of the accounts receivable turnover will depend on the industry the business operates in.

A low accounts receivable turnover can indicate inefficiency in collecting accounts receivable from customers, leading to bad debt write offs for the business.

accounts receivable turnover calculator v 1.0
Accounts Receivable Turnover Calculator Preview

The ratio calculation is carried out using the accounts receivable turnover formula by dividing the net credit sales by the average accounts receivable for the period.

Accounts receivable turnover = Net credit sales / Average accounts receivable

Net credit sales is found on the income statement and is used to eliminate cash sales which do not create accounts receivable.

Accounts receivable is found on the balance sheet of the business. The average of the opening and closing accounts receivable balances is used to avoid distorting the result.

Using the Accounts Receivable Turnover Calculator

The Excel receivables turnover ratio calculator, available for download below, is used to compute accounts receivable turnover by entering details relating to the net credit sales and the opening and closing accounts receivable balances. The calculator is used as follows:

  • The net credit sales is entered. Net credit sales is found on the income statement of the business.
  • The opening and closing accounts receivable balances are entered. The opening and closing accounts receivable are found on the balance sheet of the business. The accounts receivable turnover calculator calculates the average value of accounts receivable during the accounting period, and the accounts receivable turnover.

There is no correct value for the accounts receivable turnover as it depends on the industry in which the business operates. It is useful to compare the calculated figure with other businesses in your industry using figures available from published financial statements.

Accounts Receivable Turnover Calculator Download

The accounts receivable turnover spreadsheet is available for download in Excel format by following the link below.

Notes and major health warnings
Users use this accounts receivable turnover calculator at their own risk. We make no warranty or representation as to its accuracy and we are covered by the terms of our legal disclaimer, which you are deemed to have read. This is an example of an accounts receivables turnover accounting tool that you might use when considering how to calculate accounts receivable turnover. It is purely illustrative. This is not intended to reflect general standards or targets for any particular business, company or sector. If you do spot a mistake in this account receivable turnover calculator, please let us know and we will try to fix it.
Accounts Receivable Turnover Calculator November 6th, 2016Team

You May Also Like


Related pages


definition of retail shrinkpetty cash template exceldebtor days outstandingweighted average cost accountingan example of a contra asset account iscalculate net present value excelcalculate net present value excelmeaning of accounting cyclebank reconciliation entriesrate of return calculator exceldays sales in accounts receivable ratiodiscounted cash flow excel formulafunctional format income statementoutstanding cheques bank reconciliationgearing ratio formula calculationpayback period exceltypical chart of accounts numberingoverstated in accountingpresent value of a growing annuitybasic p&ldays in receivable formulatotal asset turnover ratio exampleis unearned revenue a credit or debitaccounts payables journal entriesaging receivablesdirect materials cost variancetimesheet templatesformat of voucher for paymentjournal entry to record depreciationear finance formulameaning of fob shipping pointbank reconciliation statement samplefixed asset register excel templateaccounting equation expandedjurnal job order costingaccrued revenueshow to calculate future value in excelprepaid expense examplehow to calculate vertical analysis percentagesprice variance calculatorcorrecting journal entriesturnover ratio equationretained profit formuladues and subscriptions definitionpresent value of ordinary annuity calculatorwhat is the purpose of the retained earnings statementdays accounts receivable ratiohow to work out gross profit marginhow is markup calculatedstock obsolescenceformula for turnover ratioseries discount calculatordirect materials formuladiminishing depreciation formulawhat are ledgers in accountingaccounts payable debit balancehow to calculate modified irrinventory turns ratiosimple excel spreadsheet templateaccrued revenue journal entrybalance sheet excel templateaccounting temporary accountsdebit and credit meaning with examplebookkeeping sheets samplesuspense account journal entriesexpense ledger templatedebt gearing ratiojournal entries for bad debtsunearned revenue tax treatmentinsurance paid in advance journal entry