Accounts receivable turnover rate = sales revenue/average balance of accounts receivable
Average balance of accounts receivable = (opening accounts receivable+closing accounts receivable) /2
The higher the turnover rate of accounts receivable, the better, which shows that the company has fast repayment speed, short average repayment period, less bad debt loss, fast asset flow and strong solvency.
For example, Xiaoming Company's product sales revenue in August 20 17 was 5 million yuan, accounts receivable at the beginning of the year were10.6 million yuan, and accounts receivable at the end of the year were 400,000 yuan. Calculate the turnover rate of accounts receivable.
Average balance of accounts receivable = (160+40)/2 = 1 ten thousand yuan.
Accounts receivable turnover rate =500/ 100=5 times.
The analysis of accounts receivable turnover rate should be combined with the management mode of enterprises. In the following cases, the use of this indicator cannot reflect the actual situation:
First, enterprises that operate seasonally;
Second, the installment settlement method is widely used;
Third, a large number of sales settled in cash;
Fourth, a large number of sales at the end of the year or a sharp decline in sales at the end of the year.
The turnover rate of accounts receivable reflects the number of times accounts receivable are converted into cash this year. The net income of main business includes credit sales and cash sales. In fact, cash sales have nothing to do with accounts receivable, but enterprises keep business secrets and usually do not provide cash sales and credit sales in accounting statements.
Therefore, in order to facilitate retrieval, the net income of the whole main business (whether cash sales or credit sales) is listed as a numerator. The net income of main business refers to the balance of the income obtained by the enterprise in the current production and operation activities MINUS discounts and concessions.