Average collection period ratio, Financial Management

What is Average Collection Period Ratio? Please provide me report on Average Collection Period Ratio.

Posted Date: 2/14/2013 3:04:17 AM | Location : United States





Definition of ''Average Collection Period''

The estimated amount of time that it takes for a business to receive payments owed, in terms of receivables, from its clients and customers.

Calculated as:
Average Collection Period = Days * AR / Credit Sales

Where:

Days stands for Total amount of days in period
AR stands for Average amount of accounts receivables
Credit Sales stands for Total amount of net credit sales during period

Posted by Alice | Posted Date: 2/14/2013 3:05:33 AM


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