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Collection Ratio |
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Collection ratio The ratio of a company's accounts receivable to its average daily sales, which gives the average number of days it takes the company to convert receivables into cash. Days' Sales Outstanding In accounting, a company's average collection period. Usually calculated monthly, it indexes the relationship between outstanding accounts receivable and total sales over a given period and is a common tool in measuring liquidity. Tracking trends in days' sales outstanding can also indicate the level of credit risk a company is willing to extend at different points of time. It is also called the collection ratio. Want to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit the webmaster's page for free fun content. |
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