How fast customers pay me. The Receivables Turnover Calculator takes net credit sales for the period, receivables at the start, receivables at the end, days in the period and returns receivables turnover plus average collection period, average receivables. Results update as you type, and the formula is shown under the result so you can repeat it in your own spreadsheet.
Financial ratios are only useful in comparison: against last year, against a competitor, or against the benchmark for your industry. Take the figures from the same set of accounts, note whether they are yearly or monthly, and read each ratio alongside the others in its family. Use the worked example below to check the maths against your own figures.
How the Receivables Turnover Calculator works
How many times a year you collect your average receivables balance. Compare the collection period with your payment terms: 40 days against Net 30 means customers are paying late.
Worked example
With the example values (net credit sales for the period of $1,200,000, receivables at the start of $100,000, receivables at the end of $140,000, days in the period of 365 days), the receivables turnover is 10.00x; average collection period 36 days, average receivables $120,000.00. Change any figure above and the result updates immediately; use Copy results to paste the summary into a note or email.
Related Calculators
Frequently Asked Questions
How is receivables turnover calculated?
receivables turnover = credit sales ÷ average receivables; collection period = days ÷ turnover.
Which figures do I need?
Net credit sales for the period, receivables at the start, receivables at the end, days in the period. Take them from the same period and the same set of accounts or reports so the ratio is consistent, and check the example values as a guide to the units expected.
What is a good value for this ratio?
Benchmarks differ by industry, size and business model, so compare with companies like yours and with your own history. A ratio moving in the wrong direction for several periods matters more than any single number.
