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Average Collection Period Solution

STEP 0: Pre-Calculation Summary
Formula Used
average_collection_period = Accounts Receivable/(Sales for Reporting Period/Reporting Period Length)
ACP = AR/(S/t)
This formula uses 3 Variables
Variables Used
Accounts Receivable- Accounts Receivable is the money owed to a company by providing the services.
Sales for Reporting Period- Sales for Reporting Period determines the sales over a specified period.
Reporting Period Length - Reporting period length is the time covered by a set of financial statements. It is usually represented in days. (Measured in Day)
STEP 1: Convert Input(s) to Base Unit
Accounts Receivable: 2000 --> No Conversion Required
Sales for Reporting Period: 458000 --> No Conversion Required
Reporting Period Length: 30 Day --> 2592000 Second (Check conversion here)
STEP 2: Evaluate Formula
Substituting Input Values in Formula
ACP = AR/(S/t) --> 2000/(458000/2592000)
Evaluating ... ...
ACP = 11318.7772925764
STEP 3: Convert Result to Output's Unit
11318.7772925764 --> No Conversion Required
11318.7772925764 <-- Average Collection Period
(Calculation completed in 00.031 seconds)

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Average Collection Period Formula

average_collection_period = Accounts Receivable/(Sales for Reporting Period/Reporting Period Length)
ACP = AR/(S/t)

How to Calculate Average Collection Period?

Average Collection Period calculator uses average_collection_period = Accounts Receivable/(Sales for Reporting Period/Reporting Period Length) to calculate the Average Collection Period, The average collection period is the approximate amount of time that it takes for a business to receive payments owed in terms of accounts receivable. Average Collection Period and is denoted by ACP symbol.

How to calculate Average Collection Period using this online calculator? To use this online calculator for Average Collection Period, enter Accounts Receivable (AR), Sales for Reporting Period (S) and Reporting Period Length (t) and hit the calculate button. Here is how the Average Collection Period calculation can be explained with given input values -> 11318.78 = 2000/(458000/2592000).

FAQ

What is Average Collection Period?
The average collection period is the approximate amount of time that it takes for a business to receive payments owed in terms of accounts receivable and is represented as ACP = AR/(S/t) or average_collection_period = Accounts Receivable/(Sales for Reporting Period/Reporting Period Length). Accounts Receivable is the money owed to a company by providing the services, Sales for Reporting Period determines the sales over a specified period and Reporting period length is the time covered by a set of financial statements. It is usually represented in days.
How to calculate Average Collection Period?
The average collection period is the approximate amount of time that it takes for a business to receive payments owed in terms of accounts receivable is calculated using average_collection_period = Accounts Receivable/(Sales for Reporting Period/Reporting Period Length). To calculate Average Collection Period, you need Accounts Receivable (AR), Sales for Reporting Period (S) and Reporting Period Length (t). With our tool, you need to enter the respective value for Accounts Receivable, Sales for Reporting Period and Reporting Period Length and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.
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