How is account receivable turnover calculated?

The calculation of accounts receivable turnover is achieved by taking net credit sales and dividing it by the average accounts receivable for a specific period. This metric measures how effectively a business collects its receivables and helps evaluate the efficiency of the company's credit policies.

Using net credit sales in this calculation focuses specifically on the revenue generated through credit sales, allowing for a clearer picture of how quickly the company is collecting money owed by customers. The average accounts receivable provides a balanced view over time, factoring in fluctuations in customer payments.

In the context of the options presented, dividing net credit sales by accounts receivable directly reflects the intended metric and leads to insights about a firm's collection efficiency and liquidity position, making this option the most accurate choice.