Calculation for Accounts Receivable Days

Accounts receivable days, also known as debtor days, is calculated by dividing the average accounts receivable balance by total credit sales over a specific period and then multiplying the result by the number of days in that period. It represents the average number of days it takes for a company to collect payment from its customers after a sale is made. A lower accounts receivable days figure indicates a faster collection of payments and better management of cash flow.

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