Debtors collection period - formula, Finance Basics

Debtors Collection Period - Formula

Fomula is given below:

Debtors collection period = 365/ Debtors turnover

Or (365 x Average debtors)/ Annual credit sales

This refers to credit duration that was granted to the debtors on the duration within that they were imaginary to pay their dues to the firm.

The shorter the collection period/credit duration the higher the debtors turnover and vice versa. If no opening debtors are provided requires the closing debtors to represent average debtors.

Posted Date: 1/30/2013 1:46:11 AM | Location : United States







Related Discussions:- Debtors collection period - formula, Assignment Help, Ask Question on Debtors collection period - formula, Get Answer, Expert's Help, Debtors collection period - formula Discussions

Write discussion on Debtors collection period - formula
Your posts are moderated
Related Questions
Different Risk-profile - Shareholders and Management Shareholders will generally prefer high-risk-high return investments while they are diversified that is they have many inv

Use the concepts of marginal cost and marginal revenue to derive an optimal capital budget for Company X, which has identified 7 possible investment projects and determined its cos

Debenture Finance A type of long term debt raised after a company sells debenture certificates to the holder and raises finance in return. The term debenture has its source fr

Question 1: (a) What do you meant by the term ‘Life Insurance Contract'? (b) Many people prefer to choose Single life policies compared to Joint life policies. Why is t

Prepare Journal and Adjusting Entries I need assignment help on topic Prepare Journal and Adjusting Entries. Can you please suggest me the answer. The following two events o

Example of Earnings Yield Valuation Estimated maintainable earnings are £240,000 per annum; rate of return required is 25 percent. Calculate the value of the business. V

Market Model - Methods of Computing Cost of Capital This model is utilized to establish the percentage cost of ordinary share capital cost of equity (K e ). If an investor is

Profitability Index or P.I. P.I. (benefit-cost ratio) = Present value of inflows / Present value of cash outlay Whether P.I. is greater than 1.0, invest and whereas less th

what are the difference between receipt and payment account and income and expenditure account ?.

1. Find the price of the following bonds. They are all risk-free, and the risk-free rate is 10%. (a) A fifteen-year zero coupon bond with face value $1,000. (b) A three year