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How to calculate Receivables turnover

The Receivables turnover formula, with plain worked examples you can check yourself.

Receivables turnover = R ÷ AR

The result is a number in ×.

Worked examples

R = 2000 · AR = 500Receivables turnover = 4×
R = 3200 · AR = 400Receivables turnover = 8×
R = 2400 · AR = 600Receivables turnover = 4×

How to use it

  1. Write down the values for each letter in the formula.
  2. Do the brackets first, then divide or multiply.
  3. Check the units before you compare results.
  4. Compare the answer with last period or with a competitor to see if it is good or bad.

This formula belongs to Cash & Liquidity.

Related terms

Cash flowLiquidityWorking capitalOverdraft

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