How To Calculate Debtor Days Monthly. My jan opening stock in a1 is 1000. This is how i came up with result.

The result in feb month column c2 should be 60 days. The debtor days calculator is used to calculate the debtor days, which is a ratio used to work out how many days on average it takes a company to get paid for what it sells and measure how quickly cash is being collected from debtors. Calculate the average accounts receivable balance.

How To Calculate Debtor Days From Balance Sheet. To be more specific, the first version of the debtor days calculates the debtor days ratio by dividing the trade debtor (not the whole debtor balance, just the trade debtors) with the credit sales and multiplying the result with 365 (number of days in a year). The balance displayed on the balance sheet is the closing balance.

The formula says [total sales to date] x [total days to date less debtor days]/[total days to date] and therefore calculates the cumulative cash collected to date. The accounts receivable ledger includes an itemized list of each. The basic method of calculating trade debtor days most books and websites cite the basic method which takes the trade debtors balance divided by annual credit sales times by 365.

How To Calculate Debtor Days Ratio. It is calculated by dividing debtors by average daily sales. 3) set the period you wish to measure.

Using this debtor days ratio, company x can comfortably give their clients up to 73 days to pay their invoices. As 365 days (1 year) is used in the formula you must use the annual sales figure for sales. The equation to calculate debtor days is as follows: