The Average Receivable Turnover Ratio is an important financial metric used to measure a company’s efficiency in collecting its accounts receivable. Put simply, it looks at how many times a company has been able to collect all of its billed invoices over a given period. By understanding the ratio, businesses can quickly and accurately evaluate their performance in terms of timely collections from customers and clients. A higher ratio indicates that the company is more efficient, while a lower ratio can indicate room for improvement.