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Accounts receivable refers to the outstanding balance of accounts receivable at a point in time here whereas average sales per day is the mean sales computed over some period of time. This can be annual as in the formula above, or it can be any period of time considered useful to the company.
The average inventory is the average of inventory levels at the beginning and end of an accounting period, and COGS/day is calculated by dividing the total cost of goods sold per year by the number of days in the accounting period, generally 365 days. [3] This is equivalent to the 'average days to sell the inventory' which is calculated as: [4]
Receivable turnover ratio or debtor's turnover ratio is an accounting measure used to measure how effective a company is in extending credit as well as collecting debts. The receivables turnover ratio is an activity ratio, measuring how efficiently a firm uses its assets .
Loan receivable is a banking term for an asset account that shows amounts owed by borrowers. The lender's ledger details all unpaid amounts from borrowers. Loans receivable are handled logically and transparently, like other accounting processes. [1] The balance sheet shows loans receivable as current assets if they are repaid within one year ...
In bookkeeping, a general ledger is a bookkeeping ledger in which accounting data are posted from journals and aggregated from subledgers, such as accounts payable, accounts receivable, cash management, fixed assets, purchasing and projects. [1] A general ledger may be maintained on paper, on a computer, or in the cloud. [2]
Download as PDF; Printable version; In other projects ... a financial ratio; See also. Receivable
the Receivables conversion period (or "Days sales outstanding") emerges as interval B→D (i.e.being owed cash→collecting cash) Knowledge of any three of these conversion cycles permits derivation of the fourth (leaving aside the operating cycle , which is just the sum of the inventory conversion period and the receivables conversion period .)
Sales ledger, which deals mostly with the accounts receivable account. This ledger consists of the records of the financial transactions made by customers to the business. Purchase ledger is the record of the company's purchasing transactions; it goes hand in hand with the Accounts Payable account.