Explain the term- trade receivable days, Financial Management

Assignment Help:

Explain the term- Trade receivable days (turnover)

[Yearend trade receivables/Credit sales (or turnover)] x   365days

It is the average length of time taken by customers to pay.

A long average collection means poor credit control and henceforth cash flow problems may occur. Normal stated credit period is 30 days for most industries.

Changes in the ratio may be because of improving or worsening credit control. Major new customer pays slow orfast. Change in credit terms or early settlement discounts are offered to customers for early payment of invoices.

 


Related Discussions:- Explain the term- trade receivable days

Agency relationships, conflicts between shareholders and government in agen...

conflicts between shareholders and government in agency relationship

Tax-backed debt, An analyst should first examine the issuers ...

An analyst should first examine the issuers debt structure in order to analyze the tax-backed debts. The debt burden consists of respective direct a

What is the importance of investigation of incidents, Q. What is the import...

Q. What is the importance of investigation of incidents? 1. Incident investigation is the process of identifying the underlying causes of incidents and implementing steps to pr

Example on hedge fund, Q. Example on hedge fund? Hedge Fund enters agre...

Q. Example on hedge fund? Hedge Fund enters agreement to sell HK$ in six month's. At expiration the Hedge Fund requires to buy spot HKD and deliver these against the short futu

Determine interest coverage ratio, Q. Determine Interest coverage ratio? ...

Q. Determine Interest coverage ratio? Current interest coverage ratio = 7000/500 = 14 times Increased profit before interest and tax = 7000 × 1.12 = $7.84m Increased inte

Loans from the financial institutions, Loans from the financial institution...

Loans from the financial institutions: Financial institutions such as the commercial bank life insurance corporation, industries financial development corporation bank of the

Characteristics and effects of saps, CHARACTERISTICS AND EFFECTS OF SAPS ...

CHARACTERISTICS AND EFFECTS OF SAPS Although SAPs differ somewhat from country to country, they typically have the following features: Reduction in Trade Barriers SAP’s r

Floor Brokers, Floor Brokers These people have the responsibility of ex...

Floor Brokers These people have the responsibility of executing the trades forwarded by the FCMs on the floor of the exchange. They can also trade for their own account. They w

Value index numbers, Value Index Numbers The value index number as desc...

Value Index Numbers The value index number as described earlier is a combination index which combines price and quantity changes. Because of the difficulties experienced in pri

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd