# average collection period

Also found in: Acronyms.

## Accounts Receivable Turnover

The average amount of time it takes for a business to collect on its accounts receivable. This is calculated by multiplying the amount in accounts receivable by the number of days in a given period and dividing into the total amount of credit sales. Accounts receivable turnover is a way to determine how a business' credit risk compares to that of its competitors.

## average collection period

see DEBTORS RATIO.
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson
References in periodicals archive ?
C was the condition attribute in each enterprise; [C.sub.1] was gross profit rate; [C.sub.2] was times interest earned; [C.sub.3] was monthly sales volume; [C.sub.4] was the quantity of monthly orders; C was consumer evaluation index; [C.sub.6] was average collection period; [C.sub.7] was the registered fixed number of years; [C.sub.8] was tourists' conversion rate; [C.sub.9] was tourists' collecting rate; [C.sub.10] was monthly store views; D was decision attribute.
Average SD Firm value 0.251 4.328 1.996 0.276 Debt financing 10542 6253379 2005417 154.236 Stock issue financing 426327 55102447 26340921 1063.314 Retained earnings financing 26541 922635 418627 102.155 Average collection period 5 107 49.6 0.227 Average turnover in days 3 86 42.7 0.406 Average debt payment period 7 99 53.2 0.581 Cash conversion cycle 9 120 76.3 0.421 Firm size 11.415 39.623 21.547 4.269 Book value of equity to 0.102 4.263 1.745 0.448 sale ratio Operating profit to sale 0.073 0.586 0.196 0.672 Financial leverage 0.082 0.926 0.576 0.326 Determination of model estimation method- Significance test of fixed effects method:
The average collection period or receivables collection period correspond to the average time in days for which business has to wait before its receivables are converted into cash.
A similar non-linear relationship to sales growth is also found with average collection period (DSO) and average days' credit (DPO).