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.