The average A/R turnover ratio for ABC Company is calculated as follows: The average A/R for ABC Company is calculated as follows: Sample 1: Accounts Receivable Turnover Ratio for ABC CompanyĪBC Company had the following results last year: Accounts Receivable Turnover Ratio Examplesįor you to have a good grasp of how to calculate the A/R turnover ratio, we provided examples using two fictitious companies. What’s acceptable for a bookkeeping service company may not be acceptable for a photographer. Part of your analysis should be finding out what the average A/R turnover ratio is for your industry to see how yours matches up. Whichever way your A/R ratio is trending, you’ll need to do additional research to determine the cause. It could also be an indication that you need a more streamlined A/R process that includes promptly invoicing customers and sending payment reminders before invoices become due.
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