Receivables Turnover Formula in Excel

The Receivables Turnover formula in Excel with MarketXLS helps you quickly measure how effectively a company manages its outstanding accounts receivables. By comparing net credit sales to average receivables, this ratio informs you about the efficiency of debt collection and credit extension practices.

Understanding Receivables Turnover

• Purpose and Use Cases: Use the Receivables Turnover ratio to evaluate how often a company collects its average accounts receivable within a period.
• Key Benefits:
  • Helps in assessing credit policies.
  • Measures collection efficiency.
  • Indicates overall cash flow health.
• When to Use: Especially useful for companies with significant credit sales to identify trends in collection times or to compare with industry benchmarks.

Syntax and Parameters

Use the ReceivablesTurnover function to fetch and calculate the Receivables Turnover ratio for a specified symbol.

=ReceivablesTurnover(Symbol)

• Return Value: A numeric ratio representing net credit sales divided by average accounts receivable.
• Error Handling: Returns "NA" if the symbol is invalid or if any data retrieval issue occurs.
• Special Cases and Limitations:
  • Requires a valid MarketXLS subscription.
  • May differ from other sources due to timing or data-feed adjustments.

?? Note: The function focuses on symbol-based inputs. Date parameters are not required for this function, but if future updates include date filtering, you can reference dates in these ways:

1. By cell reference: =ReceivablesTurnover(A1)
2. By direct input: =ReceivablesTurnover("2024-03-15")
3. By Excel date function: =ReceivablesTurnover(TEXT(A1,"yyyy-mm-dd"))

Examples and Usage

1. Basic Example

   =ReceivablesTurnover("MSFT")

   Retrieves the receivables turnover ratio for Microsoft.

2. Cell Reference
   Suppose cell A1 contains the text MSFT:

   =ReceivablesTurnover(A1)

   Fetches the ratio based on the symbol in A1.

3. Various Symbol Formats

   • Indices:

     =ReceivablesTurnover("^SPX")

   • Options:

     =ReceivablesTurnover("@MSFT 110122C00020000")

   • Cryptocurrencies:

     =ReceivablesTurnover("BTCUSD:DEFAULT")

? Pro Tip: Compare the receivables turnover ratios of multiple symbols to spot trends or industry outliers.

Common Questions

What does the Receivables Turnover ratio tell me?

It indicates how efficiently a company manages its credit and collects payments from customers. A higher ratio typically suggests faster collection.

Why am I getting “NA”?

• The symbol provided may be incorrect or not available in the MarketXLS database.
• Your MarketXLS license or data feed may be invalid or expired.
• The company data might be temporarily unavailable.

How does performance impact this function?

This function uses web queries to retrieve live or recent data, which may cause slight delays depending on your internet speed and MarketXLS server load.

Are there any best practices for using Receivables Turnover?

• Periodically compare your results (e.g., quarterly or annually) for trend analysis.
• Correlate with inventory turnover or other ratios for a more comprehensive view of company performance.
• Validate data periodically to ensure accuracy.