The study guide in Section 2.1 is a little confusing regarding how to calculate Aged accounts receivable. I don’t understand how the result is 36.5 days. Please clarify.
@peaceloveshakti The formula presented in the lecture video Firm Financials: Profit-Lost Statement is:
Aged Accounts Receivable = Average Annual Accounts Receivable / [Net Operating Revenue / 365 ]
The example figures plugged in are $150,000 / [$1,500,000 / 365] = 36.5 days.
Average Annual Accounts Receivable is found in the assets section of the Balance Sheet, while NOR is found in the Profit-Loss Statement.
Check out The Architect’s Handbook of Professional Practice, page 418 for more about this metric.
Hope this helps!
Kiara Galicinao, AIA, NCARB
Product Coordinator
Black Spectacles