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What is Average Collection Period
Average Collection Period is a term that indicates how many days it takes before the receivables are transferred to the money (collected).

Average Collection Period, the abbreviation ACP or DSO - Day’s Sales Outstanding can be used. It is a term that indicates how many days it takes before the receivables are transferred to money (collected).

Calculation:

ACP = Receivables / (Sales/360)

Use of the ACP in practice: In the enterprise it used by CFO in financial analysis to analyze ratios. In the evaluation according to this indicator, it must take into account the practice of the country, size of the enterprise, enterprise market position and other factors.

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Last update: 18.02.2016

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