The Receivables Turnover Times, (RTT) measure assesses the level of cash sales relative to credit. For instance, if total sales are $100 and a company has $50 in accounts receivables, the measure would be 2 – or cash sales are twice as common as credit sales. A low figure may indicate that underlying cashflow issues may surface from time to time. Please note that it is not possible for Jazoodle to identify how many sales are created by offering credit to a company’s customers. However, it can be estimated by relating the total revenue to the number of debtors that a business has in place.

Check your receivables turnover time with Jazoodle now

Definition used:

The level of sales compared to the level of credit outstanding with your clients. Your company’s Receivables Turnover Time is calculated by the following:

Annual Measure:

Total Income divided by Total Accounts Receivable Amount

Monthly Measure:

Total Income Current Month divided by Total Accounts Receivable Amount Current Month

Your RTT can be improved in a number of ways, including:

• Collect your client invoices and revenues more promptly
• Increase sales revenues without a similar increase in credit to clients