Accounts Receivable Turnover (ART)

Accounts receivable turnover (ART) ratio, or simply receivables turnover ratio, helps determine a company’s efficiency in handling collections for products or services. Calculating your ART ratio helps you evaluate how long it takes to collect the outstanding debt throughout the accounting period.

To calculate your accounts receivable turnover ratio, use the following formula:

Accounts Receivable Turnover Ratio = Net Sales on Credit/Average Receivables