Certified Management Accountant Practice Exam 2025 - Free CMA Practice Questions and Study Guide

The measure that evaluates the liquidity of accounts receivable is accounts receivable turnover. This metric indicates how efficiently a company collects cash from credit sales. It is calculated by dividing net credit sales by the average accounts receivable for a period. A higher turnover ratio illustrates a quicker collection period, reflecting strong liquidity and efficient credit management.

In contrast, other metrics serve different purposes: the debt to equity ratio assesses a company's financial leverage by comparing its total liabilities to its shareholders' equity; the current ratio measures a company's ability to cover its current liabilities with its current assets but does not focus specifically on accounts receivable; and the quick ratio, while also a liquidity measure, includes only the most liquid assets and does not precisely isolate accounts receivable's efficiency. Therefore, accounts receivable turnover is the specific metric that directly reflects how well a company manages its receivables in terms of liquidity.