The amount of time that elapses between a sale and receipt of payment for that sale provides information about the financial structure of a company, including how the company manages its receivables. Calculating days receivable, or the average number of days sales are outstanding, is easy now with this calculator:
Days Receivable Calculator
| Days receivable = = | Accounts receivable balance | |
| Average day’s sales = = | Net sales | |
| 365 | ||
Efficiency ratios can indicate how efficiently a business manages its assets. Days receivable is the collect-ability of accounts receivable, answering the question “how fast can cash supply be built?” with a number of days.
Calculating this number of days receivable helps determine if a change in receivables is a result of a change in sales. Comparing days receivable with the company’s credit terms indicates how customers obey the terms of credit.
About the tool
I built this tool with Flash in 2007. I rewrote it in JavaScript in 2011 since Flash is now of questionable compatibility. The reset button restores all values to defaults, and the about button launches this web page. If you have trouble or suggestions please leave comments here.
Comments
3 responses to “Calculate days receivable”
Where do I get the “net sales” and “accounts receivable balance” for a given company? In theier annual financial reports?
why is net sales is used in the calculation and how will you arrive at the net sales?
Feb’15 AR balance is 18000, Net credit sales is 5686. How I can calculate the DSO?