Receivables Days

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5 Terms

1
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What are trade receivables?

Amounts owed to a business by customers

2
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What are receivables days?

The average length of time taken by customers to pay amounts owed

3
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What is the equation for debtor days?

{Trade receivables/Revenue (sales)} x365

4
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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

5
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What should you look out for?

  • Comparisons (good or bad) v competitors

  • Balance sheet window-dressing