Days Receivables

Days Receivables

Dictionary Definition

This expresses the average number of days that receivables are outstanding. Generally, the greater number of days outstanding, the greater the probability of delinquencies.

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Why it Matters to You

A high number shows that a company is selling its product to customers on credit and waiting a long time to collect the money. This can lead to cash flow problems. A low value means that it takes a company fewer days to collect its accounts receivable. That company is promptly getting the money it needs to create new business.