Average collection period ratio, Financial Management

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

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Alice 2/14/2013 3:05:33 AM 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

Alice

2/14/2013 3:05:33 AM

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

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