Formula for Accounts Receivable (A/R) Days

The formula for accounts receivable (A/R) days is calculated by dividing the average accounts receivable by total credit sales and then multiplying the result by the number of days in the period. It measures the average number of days it takes for a company to collect payments from its customers after making a sale. A lower A/R days value indicates faster cash conversion and efficient credit management, while a higher value may suggest delayed payments and potential cash flow challenges.