Final answer:
The question refers to the Accounts Receivable Turnover Ratio, which is a business metric used to measure how quickly a company collects on its credit sales.
Step-by-step explanation:
The student is inquiring about a business concept that deals with evaluating the efficiency of collecting receivables. Although the money multiplier is mentioned in the provided context, it does not pertain to the speed at which outstanding accounts are paid. Instead, the correct formula is referred to as the Accounts Receivable Turnover Ratio, which is used in accounting to measure how quickly a company collects cash from its credit sales.
The formula for the Accounts Receivable Turnover Ratio is:
- Accounts Receivable Turnover Ratio = Net Credit Sales / Average Accounts Receivable
This formula provides insights into a company's effectiveness in managing and collecting its debts.