average age of accounts receivable
Number of Days in Receivables = 365 Days in the Year / Turnover Ratio. Using the same information from the previous example gives us 46 days on average to collect our accounts receivable for the year.Two other ratios that can be used are Receivables to Sales and Receivables to Assets.hese ratios are calculated as follows: Accounts Receivable Turnover = Credit Sales / Average Receivable Balance. Example: Annual credit sales were $ 400,000, beginning balance for accounts receivable was $ 55,000 and the yearend balance was $ 45,000.