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Ratio analysis
 
Hi can anyone shed light on this?

P&L sales figure is a monthly figure; debtors is a quarterly figure. To calculate debtors days, should we multiply by 30/365 days or 90/365 days, can anyone advise please?
 
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Guest wrote:
P&L sales figure is a monthly figure; debtors is a quarterly figure. To calculate debtors days, should we multiply by 30/365 days or 90/365 days, can anyone advise please?

Debtors days (average collection period) = debtors / daily sales  = debtors / (monthly sales / 30).

Debtors is a balance sheet figure (i.e. "on date" figure), so you need no to dived or multiply by 365.

Read about receivable turnover ratio.
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