accounts receivable turnover indicate companies’ effectiveness in terms of qualifying their credit borrowers and collecting monies own from them

accounts receivable turnover is an indication that how many times the ” Accounts Receivable ” are turned over throughout the year. The higher the value of the ratio, the better the company in terms of collecting their accounts receivable. And the lower the ratio indicate that company do not use properly its funds and companies have have poor collecting processes, a bad credit policy etc .

So high and good accounts receivable turnover indicate ratio suggest how the company generate liquidity within short period of time