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Accounts receivable turnover (ART) ratio measures how often a company collects its average accounts receivable within a specific period, typically a year. It is a reflection of the company's efficacy in issuing credit and collecting debts, serving both as a marker of financial health and a predictor of cash flow.

The average collection period is the number of days to collect payments after making credit sales.

Your net credit sales number indicates your total sales made on credit minus returns, allowances, and discounts.

Managing your working capital properly helps you maintain the right balance between your short-term assets and short-term liabilities.

Your working capital turnover ratio shows how efficiently you use your short-term assets and manage your liabilities to generate sales. Click to learn more!

The working capital requirement is a key indicator of the financial resources you’ll need before seizing new opportunities. Learn more.

In this article, we discuss the key elements of negative working capital and the working capital formula.

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