Average age of accounts receivable
Average age of accounts receivable
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
Average Age of Accounts Receivable
The total amount of time a company's accounts receivable have been uncollected divided by the number of outstanding invoices. For example, suppose a company has three outstanding invoices, one for 30 days, one for 40 days, and one for 90 days. Their average age is accounted as follows:
Average age of accounts receivable = (30 + 40 + 90) / 3 = 53.33 days
Average age of accounts receivable = (30 + 40 + 90) / 3 = 53.33 days
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved