The A/R Turnover Ratio Formula is a financial metric used to measure how quickly a business is able to collect cash from its customers. It is calculated by dividing total credit sales during the period by the average accounts receivable balance over the same period. By monitoring this ratio, businesses can get a better understanding of their cash flow cycle and adjust their processes accordingly. In essence, it’s a way for businesses to ensure they’re getting paid what they’re owed as quickly as possible.