The Receivables Turnover Ratio is a business metric that measures how efficient a company is in collecting its receivables over a period of time. It is calculated by dividing total credit sales by the average net accounts receivable during the same period. A high turnover ratio means that a business is collecting quickly and efficiently, while a low ratio suggests it takes longer for the company to collect on its customer’s invoices. Knowing your Receivables Turnover gives you insight into how well your organization is doing at cash collection, so you can make timely decisions to maximize profits.