Receivables Days

Trade Receivables (Debtors):

• Amounts owed to a business by customers

What are Receivables Days?

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

Receivables (Debtor) Days:

• {Trade receivables/Revenue (sales)} x365

Evaluating Receivable Days:

• Interpreting the results:

  • Shows the average time customers take to pay

  • Each industry will have a ‘norm’

  • Look out for significant changes

• Look out for:

  • Comparisons (good or bad) v competitors

  • Balance sheet window-dressing