Compute the average debtor collection period for a company with Accounts Receivable (Debtors) outstanding totaling C14,000 and annual sales of C132,000. If the maximum credit period granted by the company is 21 days, what might explain the difference in the average collection period? What questions does this raise and what suggestions could you make to management that might improve the situation?

Answer rating: 100% (QA)

Average Debtor Collection Period Calculation Formula Average Debtor Collection Period Days Accounts Receivable Net Credit Sales x 365 days Given Accou... View the full answer