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Understand Receivables as a part of Working Capital.
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Quick reference
Working Capital Adjustments Part 2
Understand working capital adjustments.
When to use
When constructing a basic financial model.
Instructions
 Definition
 Current assets minus current liabilities
 Working capital measures how much in liquid assets a company has available to build its business
 Analysts will often only consider trade receivables, trade payables and inventory
 The number can be positive or negative

Clearly, the credit period is the “gap” at the beginning of the time period, i.e. 247/1000 x 365 days = 90 days. This can be represented formulaically as:
Days Receivable = (Closing Debtors x Days in Period) / Sales in Period
Rearranging, this becomes:
Closing Debtors = (Sales in Period x Days Receivable) / Days in Period,
e.g. in our example: 247 = (1000 x 90) / 365.
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