Accounts Receivable Analysis

Account receivables are funds owed to your business yet to be paid. Successful businesses collect money that is owed to them in a timely and efficient manner.

When you’re not collecting the receivables, you’re not collecting the cash to pay for the goods and services you’ve provided. The ‘Receivables Turnover Ratio’ measures the effectiveness of your business extending credit and collecting debt. A high ratio means your business is effective in dealing with its receivables. The “Accounts Receivable to Sales Ratio” is the amount tied up in receivables compared to the sales.

 

 

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