What ability does the accounts receivable turnover rate reflect? It is as follows:

The accounts receivable turnover rate reflects the operational ability of the enterprise.

The higher the turnover rate of accounts receivable, the faster the company collects accounts, shorter the average collection period, less bad debt losses, faster asset flow and stronger solvency. Correspondingly, the shorter the average collection period, the better.

what does a high turnover rate of accounts receivable mean?

The high turnover rate of accounts receivable means that the enterprise collects accounts quickly and has a short account age; Strong liquidity of assets and strong short-term solvency; Can reduce bad debt losses, etc. Accounts receivable turnover rate is the ratio of net income from credit sales to average accounts receivable balance in a certain period of time. The increase of accounts receivable turnover rate reflects the accelerated realization of accounts receivable and the enhanced solvency of enterprises. The collection speed is fast and the collection cost is low.

what is the appropriate turnover rate of accounts receivable?

Generally, the normal value of accounts receivable turnover rate is: the social average value is 7.8, the excellent value is 24.3, and the good value is 15.2; The average construction industry is 4.2, real estate industry is 3.8, wholesale and retail industry is 8.9, accommodation and catering industry is 8.3, and light industry is 6.1.

what are the influencing factors of accounts receivable turnover rate?

The influencing factors of accounts receivable turnover rate include the proportion of sales revenue on credit, the reliability of year-end balance of accounts receivable, provision for impairment of accounts receivable, whether bills receivable are included in accounts receivable turnover rate, and average collection period.

calculation formula of accounts receivable turnover rate

accounts receivable turnover rate refers to the average number of times accounts receivable are collected in a certain period, and its calculation formula is:

accounts receivable turnover rate = net sales revenue ÷ average balance of accounts receivable

where

net sales revenue = sales revenue-sales discounts and discounts

average balance of accounts receivable = (opening accounts receivable+closing accounts receivable)

Accounts receivable refers to the money that an enterprise should collect from the purchasing unit for selling goods, products, providing labor services and other businesses in the normal business process. It is a creditor's right formed with the sales behavior of the enterprise, including taxes that should be borne by the purchasing unit or the labor service receiving unit, and various transportation and miscellaneous fees paid by the purchasing buyer, that is, the creditor's right that has occurred and will occur in the future.