Buying & Selling a Business

What is the the Average Collection Period ratio ?

This ratio illustrates the average number of days it takes to collect cash from the business's credit sales. Accounts Receivable divided by (Annual Sales divided by 365). The Average Collection Period is meaningful only in relation to the business's credit terms.

Need Professional Help?

If you need help with "Buying & Selling a Business" or have other tax questions, we can help you find a local licensed tax preparer for a free, no-obligation consultation.