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The Average Collection Period measures the average number of days it takes for the company to collect revenue from its credit sales.The Average Daily Sales is the Net Sales divided by 365 days in the year.he Average Collection Period measures the average number of days it takes for the company to collect revenue from its credit sales.
Average Collection Period represents the average number of days it takes the company to convert receivables into cash. Average Collection Period formula is: Receivables Turnover Ratio formula is: Average collection period measures the average number of days that accounts receivable are outstanding. This activity ratio should be the same or lower than the company's credit terms.