The formula for the receivables turnover ratio is net credit sales divided by average accounts receivable.
What is receivable turnover ratio?
The receivable turnover ratio is what measure the number of times over a given period that a company collects its average account.
It is the number of times per year that a business collects its average accounts receivable.
Hence, the formula for the receivables turnover ratio is net credit sales divided by average accounts receivable.
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