Accounts Receivable Turnover Calculator

Accounts receivable turnover ratio and days sales outstanding (DSO) from net credit sales and beginning and ending receivables.

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If you already have an average balance, enter it in both boxes.
365 for a year (360 is also used); 90 for a quarter, with that quarter’s sales.
Receivables turnover
5.00 times
Days sales outstanding (DSO)
73.0 days
Average accounts receivable
$80,000.00

Estimate generated with SortedSums: https://sortedsums.com/accounts-receivable-turnover-calculator/. For informational purposes only; verify before relying on it.

How it’s calculated

Receivables turnover shows how many times a period’s receivables are collected and turned into cash. Days sales outstanding (days’ sales in receivables) turns that into the average number of days it takes to collect.

Average AR = (Beginning AR + Ending AR) ÷ 2 AR turnover = Net credit sales ÷ Average AR DSO = Days in period ÷ AR turnover

Example (OpenStax, BWW 2017): net credit sales 400,000; AR 70,000 at the start and 90,000 at the end. Average AR = 80,000, turnover = 400,000 ÷ 80,000 = 5 times, and DSO = 365 ÷ 5 = 73 days.

Frequently asked questions

What is a good accounts receivable turnover?

Higher is generally better: customers pay faster. Compare DSO with your credit terms; with net-30 terms, a DSO well above 30 days means customers are paying late.

Should I use total sales or credit sales?

Net credit sales, because cash sales never create a receivable. Using total sales overstates turnover if a large share is paid in cash.

Is DSO the same as days’ sales in receivables?

Yes. Both measure the average collection period in days.

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Sources

Formulas are taken from the free public references above. Results are provided “as is” for informational and educational purposes only. See our disclaimer.

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