to calculate (average) collection period:
Period = Accounts Receivable X 365 days
Accounts Receivable Turnover Ratio
average collection period calculation uses the average
accounts receivable over the sales period.
Collection Period definition and explanation:
period or average collection period must be compared to
competitors to see whether the credit given, and
customer risk, is in line with the industry.
A high collection
period shows a high cost in extending credit to
Accounts Receivable Turnover formula
The collection period is included in the financial
statement ratio analysis spreadsheets highlighted in the
left column, which provide formulas, definitions,
calculation, charts and explanations of each ratio.
The average collection period is listed in our efficiency
|The average collection
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The average collection
period is included in our
which calculates 15 key business ratios, only
The collection period or
average collection period ratio may be included
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