Accounts Receivable Turnover Ratio Calculator

This calculator helps you determine how efficiently your company collects its accounts receivable. The ratio measures how many times a company collects its average accounts receivable balance during the accounting period.

Input Parameters

Calculation Results

Calculation Formula

Accounts Receivable Turnover Ratio = Net Credit Sales / Average Accounts Receivable

Where:
Net Credit Sales - Total sales made on credit during the period
Average Accounts Receivable - (Beginning Accounts Receivable + Ending Accounts Receivable) / 2

Your Result

Accounts Receivable Turnover Ratio: 0.00
Days Sales Outstanding (DSO): 0.00

Lower DSO indicates more efficient collection of receivables.

Accounts Receivable Turnover Ratio Calculator Usage Guide

Learn how to use the Accounts Receivable Turnover Ratio Calculator and its working principles

How to Use This Calculator

  1. Enter your Net Credit Sales for the period (total sales made on credit)
  2. Enter your Average Accounts Receivable (the average of beginning and ending accounts receivable balances)
  3. Click the Calculate button to see your Accounts Receivable Turnover Ratio and Days Sales Outstanding
  4. Use the Reset button to clear all inputs and start over

Understanding the Results

The Accounts Receivable Turnover Ratio measures how quickly a company collects its receivables. A higher ratio indicates more efficient collection, while a lower ratio may suggest collection problems.

Days Sales Outstanding (DSO)

DSO tells you how many days it takes, on average, for your company to collect payment after a sale has been made on credit. A lower DSO is generally better as it means you're collecting cash faster.

Interpreting the Results

  • A ratio of 10 means your company collects its receivables 10 times per year
  • A DSO of 36 means it takes, on average, 36 days to collect payments
  • Compare your results to industry averages to determine if your collection process is efficient