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Average collection period, or days' receivables |
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Definition of Average collection period, or days' receivablesAverage collection period, or days' receivablesThe ratio of accounts receivables to sales, or the total
Related Terms:PPF (periodic perpetuity factor)a generalization formula invented by Abrams that is the present value of regular but noncontiguous cash flows that have constant growth to perpetuity. Annualized holding period returnThe annual rate of return that when compounded t times, would have Arithmetic average (mean) rate of returnArithmetic mean return. AverageAn arithmetic mean of selected stocks intended to represent the behavior of the market or some Average accounting returnThe average project earnings after taxes and depreciation divided by the average Average age of accounts receivableThe weighted-average age of all of the firm's outstanding invoices. Average cost of capitalA firm's required payout to the bondholders and to the stockholders expressed as a Average lifeAlso referred to as the weighted-average life (WAL). The average number of years that each Average maturityThe average time to maturity of securities held by a mutual fund. Changes in interest rates Average (across-day) measuresAn estimation of price that uses the average or representative price of a Average rate of return (ARR)The ratio of the average cash inflow to the amount invested. Average tax rateTaxes as a fraction of income; total taxes divided by total taxable income. Bank collection floatThe time that elapses between when a check is deposited into a bank account and when the funds are available to the depositor, during which period the bank is collecting payment from the payer's bank. Collection floatThe negative float that is created between the time when you deposit a check in your account Collection fractionsThe percentage of a given month's sales collected during the month of sale and each Collection policyProcedures followed by a firm in attempting to collect accounts receivables. Compounding periodThe length of the time period (for example, a quarter in the case of quarterly Credit periodThe length of time for which the customer is granted credit. Days in receivablesaverage collection period. Days' sales in inventory ratioThe average number of days' worth of sales that is held in inventory. Days' sales outstandingaverage collection period. Discount periodThe period during which a customer can deduct the discount from the net amount of the bill Discounted payback period ruleAn investment decision rule in which the cash flows are discounted at an Dow Jones industrial averageThis is the best known U.S.index of stocks. It contains 30 stocks that trade on Evaluation periodThe time interval over which a money manager's performance is evaluated. Holding periodLength of time that an individual holds a security. Holding period returnThe rate of return over a given period. Moving averageUsed in charts and technical analysis, the average of security or commodity prices Multiperiod immunizationA portfolio strategy in which a portfolio is created that will be capable of Net periodThe period of time between the end of the discount period and the date payment is due. Neutral periodIn the Euromarket, a period over which Eurodollars are sold is said to be neutral if it does not Receivables balance fractionsThe percentage of a month's sales that remain uncollected (and part of Receivables turnover ratioTotal operating revenues divided by average receivables. Used to measure how Simple moving averageThe mean, calculated at any time over a past period of fixed length. Subperiod returnThe return of a portfolio over a shorter period of time than the evaluation period. T-period holding-period returnThe percentage return over the T-year period an investment lasts. Waiting periodTime during which the SEC studies a firm's registration statement. During this time the firm Weighted average cost of capitalExpected return on a portfolio of all the firm's securities. Used as a hurdle Weighted average couponThe weighted average of the gross interest rate of the mortgages underlying the Weighted average lifeSee:average life. Weighted average maturityThe WAM of a MBS is the weighted average of the remaining terms to maturity Weighted average remaining maturityThe average remaining term of the mortgages underlying a MBS. Weighted average portfolio yieldThe weighted average of the yield of all the bonds in a portfolio. Workout periodRealignment period of a temporary misaligned yield relationship that sometimes occurs in NUMBER OF DAYS SALES IN RECEIVABLES(also called average collection period). The number of days of net sales that are tied up in credit sales (accounts receivable) that havenâ€™t been collected yet. WEIGHTED AVERAGEAn inventory valuation method that calculates a weighted average cost per unit for all the goods available for sale. Accounting periodThe period of time for which financial statements are produced â€“ see also financial year. Period costsThe costs that relate to a period of time. Weighted average cost of capitalSee cost of capital. Periodic inventory systemAn inventory system in which the balance in the Inventory account is adjusted for the units sold only at the end of the period. Weighted averageA method of accounting for inventory. weighted-average cost of capitalWeighted means that the proportions of Average Collection Periodaverage number of days necessary to receive cash for the sale of Payback PeriodThe number of years necessary for the net cash flows of an Weighted Average Cost of Capital (WACC)The weighted average of the costs of the capital components compounding periodthe time between each interest computation dollar days (of inventory)a measurement of the value of inventory for the time that inventory is held payback periodthe time it takes an investor to recoup an period costcost other than one associated with making or acquiring inventory periodic compensationa pay plan based on the time spent on the task rather than the work accomplished weighted average cost of capitala composite of the cost of the various sources of funds that comprise a firmâ€™s capital structure; the minimum rate of return that must be earned on new investments so as not to dilute shareholder value weighted average method (of process costing)the method of cost assignment that computes an average cost per Moving averageA price average that is adjusted by adding other Moving-averages chartA financial chart that plots leading and lagging Odd first or last periodFixed-income securities may be purchased on dates Average inventoryThe beginning inventory for a period, plus the amount at the end of Moving average inventory methodAn inventory costing methodology that calls for the re-calculation of the average cost of all parts in stock after every purchase. Reporting periodThe time period for which transactions are compiled into a set of financial statements. average tax rateTotal taxes owed divided by total income. collection policyProcedures to collect and monitor receivables. Dow Jones Industrial AverageIndex of the investment performance of a portfolio of 30 â€śblue-chipâ€ť stocks. payback periodTime until cash flows recover the initial investment of the project. weighted-average cost of capital (WACC)Expected rate of return on a portfolio of all the firmâ€™s securities, adjusted for tax savings due to interest payments. Average Propensity to ConsumeRatio of consumption to disposable income. See also marginal propensity to consume. Average Propensity to SaveRatio of saving to disposable income. See also marginal propensity to save. Accounts Payable Days (A/P Days)The number of days it would take to pay the ending balance Accounts Receivable Days (A/R Days)The number of days it would take to collect the ending Average-Cost Inventory MethodThe inventory cost-flow assumption that assigns the average Average Amortization PeriodThe average useful life of a company's collective amortizable asset base. Days StatisticsMeasures the number days' worth of sales in accounts receivable (accounts receivable Extended Amortization PeriodAn amortization period that continues beyond a long-lived asset's economic useful life. Extended Amortization PeriodsAmortizing capitalized expenditures over estimated useful lives that are unduly optimistic. Inventory DaysThe number of days it would take to sell the ending balance in inventory at the Periodic inventoryA physical inventory count taken on a repetitive basis. Grace PeriodA specific period of time after a premium payment is due during which the policy owner may make a payment, and during which, the protection of the policy continues. The grace period usually ends in 30 days. Collection DepartmentAn internal department within a company staffed by specialists in collecting past due accounts or accounts receivable. Critical Growth PeriodsTimes in a company's history when growth is essential and without which survival of the business might be in jeopardy. Full Credit PeriodThe period of trade credit given by a supplier to its customer. Grace PeriodLength of time during which repayments of loan principal are excused. Usually occurs at the start of the loan period. Risk of CollectionChance that a borrower or trade debtor will not repay an obligation as promised. Weighted Average Cost of Capital (WACC)A weighted average of the component costs of debt, preferred shares, and common equity. Also called the composite cost of capital. Annuity PeriodThe time between each payment under an annuity. Waiting Period (Credit Insurance)A specific time that must pass following the onset of a covered disability before any benefits will be paid under a creditor disability policy. (Also known as an elimination period).
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