Accounts receivable turnover shows how often a company converts its average accounts receivable balance into cash during the period.

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Accounts receivable turnover is a financial ratio that measures how many times a company can collect its average accounts receivable balance during a specific period, usually a year. This ratio is essential for businesses to measure their efficiency in collecting outstanding debts from their customers. A higher accounts receivable turnover ratio indicates that the company is collecting its debts more quickly, while a lower ratio can signify issues with credit and collection policies.

Accounts Receivable Turnover Shows How Often a Company Converts Its