Receivables Turnover
Short definition
Receivables turnover is how many times receivables are collected in a year. It is the inverse of DSO. High turns mean fast collections or a cash-heavy mix.
Detailed explanation
The denominator should be credit sales; cash sales inflate turns. Factoring takes AR off and cosmetics turns up.
Falling turns is the same news as rising DSO; ageing shows which customer broke.
Why it matters for the CFO
Credit committees and collection KPIs may use turns; the cash budget is still built in DSO days.
How it is calculated
Alacak devir hızı = Kredili satış / Ortalama ticari alacak (= 365 / DSO)
Variables in the formula
- AR turns: Sales / average receivables
How to read it
Turns of 5.0× imply DSO ≈ 73 days. Contract terms set “normal”.
Numerical example
Net sales 400 mn TL, average AR 80 mn TL → turns = 5.0×. DSO = 365 / 5 = 73 days.
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What to learn next
Definitions are educational. They are not investment, credit or tax advice.