Home Real Estate Office Free Real Estate Office Business Plan 8.5 Accounts Recievable Turnover Ratio Analysis
8.5 Accounts Recievable Turnover Ratio Analysis
The Accounts Receivable (AR) Turnover Template gives a small business owner like Jose the ability to present a very crisp view of what the projected AR turnover ratio will be like for a small business like Home At Last Realty in the three years for which the financials are being projected. The AR turnover ratio denotes the number of times the accounts receivable is collected / turned over during an year. The higher the number - the better.
As we can see from our analysis, the AR turnover ratio for Home At Last Realty is projected to be 200 for all the three years of 2012, 2013 and 2014. This of course implies that the sales that we have projected will cover the accounts receivable up to 200 times and that is good news - the only caution here is of course that in the real estate business the accounts receivables typically tend to be very low anyway and hence this ratio is not given too much importance in absolute terms. However if the ratio were to change significantly due to reduced sales numbers, then this change could easily be a fore bearer of tougher times ahead for the business. It is also important to note that when times are lean and a couple of closings get held up for some reason, it can present some real cash flow challenges for a real estate office.
Quick Links:
- Go to the Corresponding Template section for this industry.
- Go to the Corresponding Questionnaire section for this industry.
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