Work out accounts receivable turnover instantly with clear inputs, formula shown and shareable results.
Receivables turnover is credit sales divided by average receivables — how many times a year the debtor book is collected. Dividing the days in the period by turnover converts it into DSO, the figure credit control teams manage against agreed terms.
Receivables turnover
Turnover = Net credit sales / Average receivables
DSO
DSO = Days in period / Receivables turnover
Yes. Including cash sales inflates turnover and understates DSO, hiding genuine collection problems.
The gap is your collection lag. A DSO of 45 days on 30-day terms means roughly 15 days of sales are overdue at any moment.