Glossarytaught in M2.02
Receivables turnover
Also called debtor turnover.
Revenue divided by average receivables. The inverse of collection days, expressed as a frequency.
An exporter turning ₹4,800 crore of revenue against ₹640 crore of receivables collects 7.5 times a year.
Most analysts work in days for receivables, because days are directly comparable to the credit terms in the contract. Turns are more useful when building a model, where a turnover assumption drives the balance projection.
Whichever form you use, use it consistently across the peer set.