Formula
to calculate collection period to payment period ratio:
Collection
Period to Payment Period = collection period / payment
period.
Collection
period to payment period ratio explanation and
definition:
The
collection period to payment period above 1:1 (100%)
indicates that suppliers are being paid more rapidly
than the company is collecting from their customers.
The collection
period, payment period
and collection period to payment period ratios are included in
the financial statement ratio analysis spreadsheets
highlighted in the left column, which provide
formulas, definitions, calculation, charts and
explanations of each ratio.
The collection period to payment period ratio is
listed in our efficiency
ratios.
| The collection period
to payment period ratio and other ratios are key
to understanding financial statements. Our
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Spreadsheets to
calculate ratios (includes formulas, definitions,
explanations and charts):
See list
of ratios , or the financial statement ratio
analysis spreadsheets which are not highlighted in the
left column, to see which other ratios are calculated
and explained in our spreadsheets.
The collection period to
payment period ratio may be included in our
custom 1, 3 or 5 period financial
statement ratio analysis spreadsheet.
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accounting spreadsheet to calculate 15 ratios with
formulas, definitions, calculations, charts, and
explanations for each ratio. .
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