Advanced Corporate Finance
Accounts receivable turnover is a financial metric that measures how effectively a company collects its outstanding credit accounts, showing the number of times accounts receivable is converted into cash over a specific period. This ratio helps businesses assess their efficiency in managing credit and collections, indicating how well they are at turning sales made on credit into actual cash flow. A higher turnover ratio suggests better performance in collecting debts, while a lower ratio may signal issues in the credit policy or collection processes.
congrats on reading the definition of accounts receivable turnover. now let's actually learn it.