Search This Blog

Tuesday, August 11, 2009

Receivables Turnover Ratio:

Receivables Turnover Ratio:

It helps to identify how quick the receivables or debtors are converted into cash. It helps to test the liquidity of the debtors of a firm. It is closely related to average collection period.

The liquidity of a firm’s receivables can be examined in two ways:

(1) Debtors receivables turnover;

(2) Average collection period.

No comments:

Post a Comment

Hit Counter by Digits Get your Google PageRank