Fundamental Glossary / Working Capital & Operational Efficiency
Receivable Days
The average number of days a credit sale stays uncollected.
Formula
Average trade receivables / revenue x number of days in the period. 365 is the usual annualiser.
What it means
Receivable days, or debtor days, put the collection lag in days. Forty-five days means the typical rupee of sales is collected a month and a half later, if the book is even.
The trend against the company's own credit terms is the point. Days well beyond the stated terms mean the terms are not real.
How to read it
Rising days absorb cash as the company grows, and they are a classic earnings-quality flag when they rise faster than sales.
What to watch
A seasonal business has a distorted year-end. Use a quarterly average if the year-end is the peak. Also remove non-trade receivables such as deposits and tax refunds.
This note explains the term. It is not a research recommendation, a target price, or a comment on any security. Ratios and regulatory thresholds change; use the latest filing or circular for a live figure.