accounts receivable (A/R) to sales ratio
Definition
Shows the relationship between unpaid sales and the total sales revenue. It is considered high if it is near to 1.0, because that means a significant amount of cash is tied up with the slow paying customers. Formula: Total accounts receivable (outstanding in an accounting period) ÷ sales revenue (in the same period).
accounts receivable (A/R) to sales ratio is in the Accounting & Auditing, Banking, Commerce & Finance and Entrepreneurship, Management, & Leadership subjects.
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