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ACCOUNTS RECEIVABLE ANALYSIS

6 五月, 2015 - 17:10

Two commonly used methods to analyze accounts receivable are

  1. accounts receivable turnover, and
  2. number of days' sales in receivables (or days sales outstanding).

Both methods measure a firm's ability to generate sales and quickly collect its accounts receivable. A lower number of days' sales in receivables indicates a firm is collecting receivables quicker. Both of these measures must be compared with other firms in the same industry.