In financial analysis, there are two key ratios used to measure the cash flow of enterprises and the efficiency of accounts receivable management: the cash collection rate of operating income and the cash collection guarantee rate of accounts receivable. Cash collection rate of operating income, that is, cash collection rate of sales, refers to the proportion of cash income generated by enterprise sales to net sales income, usually expressed as a percentage, which is used to measure the efficiency of cash withdrawal from enterprise sales activities (cash received from sales/net sales income ×111%). The higher the ratio, the stronger the ability of enterprises to withdraw cash from sales.

the cash collection guarantee rate of accounts receivable measures the proportion of cash that enterprises need to recover from accounts receivable in order to meet the necessary cash expenditure. It is (the total necessary cash expenditure in the current period-other stable and reliable cash inflows) divided by the total accounts receivable in the current period. The higher the ratio, the more critical it is for the recovery of enterprise accounts receivable to ensure the stability of cash flow.

if the proportion of accounts receivable to total assets reaches 24%, it may mean that the products of the enterprise are not well sold and there are certain risks. In this case, enterprises should strengthen the management of accounts receivable, reduce bad debts and ensure the smooth capital chain. On the other hand, if the product is popular, the enterprise may have accounts receivable in advance, and the proportion of accounts receivable is low, indicating that customers are willing to pay and have less risk.

through the evaluation of these two ratios, enterprises can understand their own cash liquidity and the health of accounts receivable management, so as to adjust their business strategies in time and ensure the financial stability and future development of enterprises.