Debtor collection period

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This article is orphaned as few or no other articles link to it. Please help introduce links in articles on related topics. (November 2006)

Indicates the average time taken to collect trade debts. In other words, a reducing period of time is an indicator of increasing efficiency.

Debtor Collection Period = (Average Debtors / Credit Sales) * 365 ( = No. of days)

Credit Sales are all sales made on credit (i.e. excluding cash sales)

You can change the multiplier to 12 (for months) or 52 (for weeks) if appropriate.

This article is orphaned as few or no other articles link to it. Please help introduce links in articles on related topics. (November 2006)