COLLECTION PERIOD (Period Average) is used to appraise accounts receivable (AR). This ratio measures the length of time it takes to convert your average sales into cash. This measurement defines the relationship between accounts receivable and cash flow. A longer average collection period requires a higher investment in accounts receivable. A higher investment in accounts receivable means less cash is available to cover cash outflows, such as paying bills. NOTE:
Barry Goldsmith
| APA | Barry Goldsmith. (2010). collection period (period average). Retrieved October 1, 2026, from http://smartdefine.org/collection_period_(period_average)/definitions/1150176 |
| Chicago | Barry Goldsmith. 2010. "collection period (period average)" http://smartdefine.org/collection_period_(period_average)/definitions/1150176 (accessed October 1, 2026). |
| Harvard | Barry Goldsmith 2010, collection period (period average), Smart Define, viewed 1 October, 2026, <http://smartdefine.org/collection_period_(period_average)/definitions/1150176>. |
| MLA | Barry Goldsmith. "collection period (period average)" 21 October 2010. Web. 1 October 2026. <http://smartdefine.org/collection_period_(period_average)/definitions/1150176> |