The debtors days ratio measures how quickly cash is being collected from debtors. The longer it takes for a company to collect, the greater the number of debtors days.[1] Debtor days can also be referred to as debtor collection period. Another common ratio is the creditors days ratio.
Debtordays=
| Yearendtradedebtors | |
| Sales |
x {Numberofdaysinfinancialyear
or
Debtordays=
| Averagetradedebtors | |
| Sales |
x {Numberofdaysinfinancialyear
when
Averagetradedebtors=
| Openingtradedebtors+Closingtradedebtors | |
| 2 |