Accounts Receivable Turnover Ratio is a measure of a company’s efficiency in collecting its receivables during the accounting period. It shows how quickly customers are paying off their debts, and it indicates how effective a company’s collection process is. Specifically, it measures the number of times receivables are “turned over” during a given period by dividing net credit sales by average accounts receivable. A high turnover rate indicates that a company is making good use of its resources, while a low rate implies poor customer management and an inefficient collection process. Knowing your Accounts Receivable Turnover Ratio can give you valuable insight into the health of your business.