Evaluating AR Management with AR Turnover Ratio (ARTR)

Evaluating AR management with the AR Turnover Ratio (ARTR) involves calculating the ratio of net credit sales to average accounts receivable during a specific period. A higher ARTR indicates more efficient management of receivables, reflecting faster turnover and effective collection efforts. Monitoring ARTR over time helps assess the effectiveness of credit and collection policies, guiding strategic decisions to improve cash flow and reduce outstanding balances.

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