Calculating the Accounts Receivable Turnover Ratio is a metric used to measure how quickly and efficiently a business collects payments from its customers. In other words, it’s a way of gauging the average amount of time it takes for a company to turn receivables into cash. The formula for calculating this ratio is: Accounts Receivable Turnover Ratio = Net Credit Sales/Average Accounts Receivable. By keeping track of this number, businesses can better understand their customer base and ensure timely payments going forward.