Ratio analysis

Guest Guest	#1 22/06/2011 08:57 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?

Vit. A.

Administrator

Posts: 268 Points: 1 Joined: 23/05/2011

22/06/2011 09:00

Quote
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.

Users browsing this topic

Financial Reporting
and Analysis Software

Login to ReadyRatios

Financial Reportingand Analysis Software

Login to ReadyRatios

Financial Reporting
and Analysis Software