Debtor days

The debtors days ratio measures how quickly cash is being collected from debtors. The longer it takes for a company to collect, the greater the number of debtors days.[1] Debtor days can also be referred to as debtor collection period. Another common ratio is the creditors days ratio.

## Definition

Debtor days=Year end trade debtorsSales×Number of days in financial year

Debtor days=Average trade debtorsSales×Number of days in financial year

when

Average trade debtors=Opening trade debtors+Closing trade debtors2

## References

1. ↑ Financial Management: Management Extra. Elsevier. 2005. pp. 92. ISBN 0-7506-6687-0.

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