What is Accounts Receivable Turnover?
A definition of Accounts Receivable Turnover
“Accounts Receivable Turnover is a financial ratio that measures how efficiently a company collects its outstanding credit accounts. It indicates how many times a company’s receivables are converted to cash over a period.”

Business Glossary > What is Accounts Receivable Turnover?
Examples of Accounts Receivable Turnover in a Sentence:
Our company’s accounts receivable turnover improved this year, indicating better collection efficiency.
A low accounts receivable turnover may suggest problems in collecting payments.
The accounts receivable turnover ratio can help assess a company’s financial health.
Why is Accounts Receivable Turnover Important in Business?
Understanding accounts receivable turnover is critical as it impacts a company’s cash flow and operational efficiency. A higher turnover ratio indicates efficient collections, leading to better cash flow management and financial stability.
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Associated Terms
Here are some associated business terms and synonyms for “Accounts Receivable Turnover”:
- Receivables Turnover
- Debtor Turnover
- Receivables Velocity
Coca-cola Accounts Receivable Turnover
Coca-cola closely monitors its accounts receivable turnover to maintain a healthy cash flow and ensure that its credit policies are effective. By consistently improving turnover rates, Coca-cola manages to optimize its collection process and sustain its operations efficiently.
Final Notes on Accounts Receivable Turnover
When considering accounts receivable turnover, businesses should focus on:
- Ensuring effective collection policies
- Monitoring cash flow performance
- Identifying potential credit risks
A higher turnover ratio typically indicates efficient credit and collection processes.
This has been a definition of Accounts Receivable Turnover meaning.
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