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Debtor Days Calculator

LAST UPDATE: August 25th, 2018

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Debtor Days – Year End Method

Debtor Days – Average Method

What is Debtor Days?

Debtor Days measures how quickly cash is collected from debtors owing the firm money.

Formula

Debtor Days (Year End Method) = (Year End Debtors / Sales) x 365

Debtor Days (Average Method) = (((Year Start Debtors + Year End Debtors) / 2) / Sales) x 365

Example

Year End Method – A company has year end debtors of $3,500 and annual sales of $12,000.

Debtor Days (Year End Method) = ($3,500 / $12,000) x 365 = 0.29167 x 365 = 106.46

Average Method – A company has year start debtors of $3,000, year end debtors of $3,500, and annual sales of $12,000.

Debtor Days (Average Method) = ((($3,000 + $3,500) / 2) / $12,000) x 365 = (($6,500 / 2) / $12,000) x 365 = ($3,250 / $12,000) x 365 = 0.27083 x 365 = 98.85

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