The Accounts Receivable Turnover Equation is an important accounting metric used to measure a business’ ability to collect its debts in a timely manner. It is calculated by dividing net credit sales by the average accounts receivable. This equation allows businesses to see how quickly their customers are paying and gives them insight into areas that could need improvement. By managing their Accounts Receivable Turnover, businesses can ensure they have enough cash flow to cover overhead costs and keep their operations running smoothly.