Studied by 0 people
Looks like no one added any tags here yet for you.
What are trade receivables?
Amounts owed to a business by customers
What are receivables days?
The average length of time taken by customers to pay amounts owed
What is the equation for debtor days?
{Trade receivables/Revenue (sales)} x365
What is the interpretations of results?
Shows the average time customers take to pay
Each industry will have a ‘norm’
Look out for significant changes
What should you look out for?
Comparisons (good or bad) v competitors
Balance sheet window-dressing
