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Days Receivables Outstanding Cash Conversion Cycle 51100 2 {{{keywords}}} {{{description}}}
AE11
Difference between revisions of "AE11"
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| − | {{this}} measures the number of days it takes a company to collect cash generated from sales. This | + | {{this}} measures the number of days on average it takes a company to collect cash generated from sales. This represents the average number of days between invoicing a customer and collecting payment. |
===Calculation=== | ===Calculation=== | ||
{{math|{{this}}|{{frac|Accounts Receivable|Revenue|365 days}}}} | {{math|{{this}}|{{frac|Accounts Receivable|Revenue|365 days}}}} | ||
Latest revision as of 00:06, 10 October 2022
Days Receivables Outstanding measures the number of days on average it takes a company to collect cash generated from sales. This represents the average number of days between invoicing a customer and collecting payment.
Calculation
| Days Receivables Outstanding | ||||
| = |
| |||
where:
- Accounts Receivable = Average Accounts Receivables (= average of beginning and ending receivables)
- Revenue = Annual Revenue
Unit of measure: Days (Calendar days)
Importance
A lower number of days indicates a better asset efficiency and cashflow.
Notes
Alternative names: Days Sales Outstanding. Statement of Financial Position
Community Importance Rating: Hierarchy
| ID | Name | Level | x |
|---|---|---|---|
| AE1 | Cash Conversion Cycle | 1 | AE1 |
| AE11 | Days Receivables Outstanding | 2 | AE11 |
| AE111 | On-time Receipts Ratio | 3 | AE111 |
| AE112 | Late Receipts Ratio | 3 | AE112 |
| AE113 | Uncollectable Receivables Ratio | 3 | AE113 |
Process(es)
| ID | Name | Level | x |
|---|---|---|---|
| D1 | Deliver-From-Stock | 2 | D1 |
| D105 | Invoice | 3 | D105 |
| D2 | Deliver-to-Order | 2 | D2 |
| D205 | Invoice | 3 | D205 |
| D3 | Deliver-To-Engineering-Order | 2 | D3 |