“Best in Class” Money Left On The Table

Money Left on the Table for Receivable Days calculation in Classic version of CFOS. This same calculation is used in the Cloud version, but it is easier to see using the BI Score tab in the Classic version. The example below uses the “Example data” preloaded into the Classic CFOS.

The calculations for figuring Receivable days are:

• 1.       Average Receivables
• 2.       Receivable Turnover (Sales ÷ Average Receivables)
• 3.       360 ÷ Receivable Turnover

Using the BI Score tab for the Example data in the Classic version and time period 12/31/2003, how did we calculate the Best in Class receivables of $57,750?

Start with #3 (above) and work backwards:

3).  360 ÷ X = 12.6 therefore X = 28.57 (Receivable Turnover)

2).  $1,125,000 ÷ X = 12.6 therefore X = $39,375 (Average Receivables)

1).  ($39,375 * 2) - $21,000 = $57,750 (Ending Receivables) ( i.e. ($57,750 + $21,000) ÷ 2 = $39,375 Average Receivables