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A high accounts receivable turnover ratio indicates.
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A high accounts receivable turnover ratio indicates.

User Yogesh Salvi
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10 votes

A high accounts receivable turnover ratio indicates that a firm is efficient in converting receivables to cash.

What is the receivables turnover ratio?

Receivables turnover ratio is an example of an activity ratio which measures how efficiently a firm carries out its daily activities. Receivables turnover ratio is the ratio of revenue to average reciveables.

Receivables turnover ratio = Revenue / average receivables

The faster it is for a firm to collect its receivables, the more efficient the firm is.

User Empi
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