Example of Collection Ratio Calculation

Collection Ratio
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Santosh Chitale
Business Consultant, India

Example of Collection Ratio Calculation

🔥NEW How does a company calculate Collection Ratio (CR) if the products sold have different payment options offered to customers?
For example: If a customer places an order for 500K, they get 45 days, but if the order is just for 50K, then the number of days allowed for payment is only 15 days. In such a scenario, the actual realization keeps on changing for the same product and for the same customer too.
How can we arrive at a distinct CR figure?

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