Receivables Turnover
Calculate the receivables turnover, a ratio that measures how efficiently a company uses its assets by comparing the amount of credit extended to customers to the amount of sales generated.
The receivables turnover ratio is an important measure of how well a company manages its accounts receivable. It indicates how quickly a company collects payments from its customers. A higher turnover ratio is generally favorable as it suggests that the company is collecting payments more quickly, which improves its cash flow and working capital management. Revenue is used in place of net credit sales, which companies rarely disclose.
The formula is as follows:
\[\text{Receivables Turnover Ratio} = \text{Revenue} / \text{Average Accounts Receivable}\]Also known as: receivables efficiency, accounts receivable turnover.
Receivables Turnover in Python or via the MCP
Install the Finance Toolkit with:
pip install financetoolkit -U
Then call get_receivables_turnover as shown below.
from financetoolkit import Toolkit
toolkit = Toolkit(
["MDT", "ABT", "SYK"],
api_key="FINANCIAL_MODELING_PREP_KEY",
start_date="2021-01-01",
end_date="2025-12-31",
)
toolkit.ratios.get_receivables_turnover()
Or, after setting up the Finance Toolkit MCP, ask:
How many times a year did Medtronic, Abbott Laboratories and Stryker collect their receivables from 2021 to 2025?
Which returns:
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| ABT | 6.6778 | 6.8718 | 6.2754 | 6.2194 | 5.9685 |
| MDT | 5.7543 | 5.4077 | 5.338 | 5.3052 | 5.5273 |
| SYK | 5.9787 | 5.6016 | 5.5929 | 5.8295 | 6.2587 |
Parameters
get_receivables_turnover accepts the following parameters.
| Parameter | Type | Description | Example |
|---|---|---|---|
rounding | int | None | The number of decimals to round the results to. Defaults to None, which uses the rounding of the Toolkit (4 unless set otherwise). | 2 |
growth | bool | Whether to calculate the growth of the ratios. Defaults to False. | True |
lag | int | list[int] | The lag to use for the growth calculation. Defaults to 1. | 4 |
compound | bool | Whether the growth is the compound annual growth rate over the lag (e.g. lag=5 for the five-year CAGR) instead of the total change. Defaults to False. | False |
standardize | bool | Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False. | True |
trailing | int | The number of periods to sum flows (income and cash flow statement items) over, with balance sheet items averaged over the same number of period ends. E.g. 4 with quarterly data gives the trailing twelve months (TTM) and 3 with annual data a three-year cumulative figure. Defaults to None, which uses single-period flows (per quarter and not annualized with quarterly data). | 4 |