These two ratios appear in the current assets category of a business's balance sheet. Accounts receivable turnover indicates how effective a company is at collecting on debts owed to it.

The two are essentially a mirror image on a company’s balance sheet—AP is a current liability, while accounts receivable is a current asset. AP is more than a set of bills to be paid since it ...

Accounts receivable is the income derived from credit accounts. For the balance sheet, it's the total amount of income to be received that's logged into the books at the close of the fiscal year.

Recall that a balance sheet is a financial snapshot which shows the current health of the business as measured in terms of its assets and liabilities. Assets include items such as cash, inventories ...