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Management indices for receivables

5 August, 2015 - 14:41
  1. Receivables turnover ratio is net credit sales / average receivables.

average monthly receivable, or average quarterly, or mean of starting / ending receivable

  1. Average Collection period is 365 / receivables turnover.

These ratios are useful in comparing the efficiency of debt recovery for this company , and for comparison with other companies of similar turnover.