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A high Days Patients Accounts Receivable number suggests a low efficiency because the hospital is providing its services to customers on credit and taking longer to get paid.
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Earnings Quality A number of tests are run (i.e. accounts receivables, intangible assets) using metrics related to the sustainability of a company's earnings.
The results showed up in 1999, when the company tripled the number of receivables it could sell to others to collect.
Archaeologists theorize that they were sent along with goods being delivered; recipients would open them and ensure that the number of receivables matched the number of clay tokens.
To find the average collections period, simply multiply the receivables by 365 (the number of days in the year) and divide by credit sales.
With the advent of cable television in the early 1950s and the use of satellites for broadcasting beginning in the early 1960s, television reception improved and the number of programs receivable increased dramatically.
And receivables could turn into writeoffs instead of cash.
The number crunching revealed high receivables, low payables, and ridiculously high inventory levels.
The levels of inventory and the number of days of accounts receivable and payable should be based upon expected operating situations and industry standard practices.
Exhibit A: The company reduced its estimate on how much of accounts receivable won't be paid, lowering the number from 6.6% of receivables to 2.2%.
Days Patients Accounts Receivable is a measure of the average number of days that a hospital takes to receive payment from the payer (e.g., insurance company, patient, government, etc).
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CEO of Professional Science Editing for Scientists @ prosciediting.com