Debtors or accounts receiver turnover, Finance Basics

Debtors or Accounts Receiver Turnover

Formula is as follow:

Debtors/accounts receiver turnover  = Annual credit sales/Average debtor

The ratio signify the number of times/frequency along with that credit customers or debtors were turned into sale that is the number of times they approach to buy on credit per year after paying their dues to the firm.

The higher the debtor's turnover the better the firm signifying that customers came to buy on credit many times hence they paid within a short duration.

Posted Date: 1/30/2013 1:43:49 AM | Location : United States

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