FRAccRecTurnover (AccountReceivable, Sales, NumOfDays)

Basic and Crystal syntax.

Format

FRAccRecTurnover(AccountReceivable, Sales, NumOfDays)

Arguments
Action

FRAccRecTurnover returns the average turnover of AccountReceivable in days (for example, AccRecTurnover = (AccountReceivable / Sales) * 360).

Typical uses

This ratio measures the turnover of accounts receivable in days. A smaller ratio represents higher turnover which means that accounts receivable is paid shortly after they are incurred. A higher turnover is generally preferable over a lower turnover which might be an indication of doubtful accounts.

Examples

The following examples are applicable to both Basic and Crystal syntax:

FRAccRecTurnover(100, 600, 360)

Returns 60.

FRAccRecTurnover(200, 300, 360)

Returns 240

Note:    None of the arguments can be negative; you may have to check for negative values before passing the arguments.

Comment

FRAccRecTurnover is one of the many financial analysis tools used in interpreting the financial position of a company. As in the case of all ratios, it has to be used with caution. It can just be used as a clue and not solid proof for forming a judgment on the financial status of a company.

Neither one of the ratios can be used alone for doing financial analysis and there are no fixed rules on the results of the ratios. Apart from differences between type of industries, result varies among different companies within the same industry and within different account periods. The results should only be used for relative comparison and trend analysis, rather than treating them as something absolute.



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