Debtor days

Debtor days

The debtors days ratio measures how quickly cash is being collected from debtors. The longer it takes for a company to collect, the greater the number of days debtors.[1] Debtor days can also be referred to as Debtor collection period.

Definition

\mbox{Debtor days} = \frac {\mbox{Year end trade debtors}} {\mbox{Sales}} \times {\mbox{Number of days in financial year}}

or

\mbox{Debtor days} = \frac {\mbox{Average trade debtors}} {\mbox{Sales}} \times {\mbox{Number of days in financial year}}

when

\mbox{Average trade debtors} = \frac {\mbox{Opening trade debtors} + \mbox{Closing trade debtors}} {\mbox{2}}

See also

  • [[]]

References

  1. ^ Financial Management: Management Extra. Elsevier. 2005. pp. 92. ISBN 0750666870. 

Wikimedia Foundation. 2010.

Игры ⚽ Нужна курсовая?

Look at other dictionaries:

  • Debtor finance — is a generic description of a funding process, based on the value of a business accounts receivable ledger. Debtor finance is also marketed as invoice discounting, factoring, cashflow finance, asset finance, invoice finance and working capital… …   Wikipedia

  • debtor collection period — average collection period The period, on average, that a business takes to collect the money owed to it by its trade debtors. If a company gives one month s credit then, on average, it should collect its debts within 45 days. The debtor… …   Accounting dictionary

  • debtor collection period — average collection period The period, on average, that a business takes to collect the money owed to it by its trade debtors. If a company gives one month s credit then, on average, it should collect its debts within 45 days. The debtor… …   Big dictionary of business and management

  • days of grace — Etymology: translation of Latin dies gratiae 1. : the days that immediately follow the day on which a bill or note becomes due on its face and that are allowed to the debtor in which to make payment 2. : grace period * * * days, usually three,… …   Useful english dictionary

  • Debtor collection period — The term Debtor Collection Period indicates the average time taken to collect trade debts. In other words, a reducing period of time is an indicator of increasing efficiency. it enables the enterprise to compare the real collection period with… …   Wikipedia

  • Days of grace — Grace Grace (gr[=a]s), n. [F. gr[^a]ce, L. gratia, from gratus beloved, dear, agreeable; perh. akin to Gr. ? to rejoice, cha ris favor, grace, Skr. hary to desire, and E. yearn. Cf. {Grateful}, {Gratis}.] 1. The exercise of love, kindness, mercy …   The Collaborative International Dictionary of English

  • days of grace — An additional three days following the date specified for payment in a negotiable instrument, allowed the obligor under the rule of law merchant and perhaps in a very few states, although not in respect of checks. Bull v First Nat. Bank, 123 US… …   Ballentine's law dictionary

  • Cash Conversion Cycle — Der Geldumschlag (auch Geldumschlagsdauer, englisch: cash conversion cycle, asset conversion cycle, net operating cycle, working capital cycle oder kurz cash cycle) bezeichnet im betriebswirtschaftlichen Controlling die Dauer der Bindung liquider …   Deutsch Wikipedia

  • Geldumschlag — Der Geldumschlag (auch Geldumschlagsdauer, englisch: cash conversion cycle, asset conversion cycle, net operating cycle, working capital cycle oder kurz cash cycle) bezeichnet im betriebswirtschaftlichen Controlling die Dauer der Bindung liquider …   Deutsch Wikipedia

  • Geldumschlagsdauer — Der Geldumschlag (auch Geldumschlagsdauer, englisch: cash conversion cycle, asset conversion cycle, net operating cycle, working capital cycle oder kurz cash cycle) bezeichnet im betriebswirtschaftlichen Controlling die Dauer der Bindung liquider …   Deutsch Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”