ACCOUNTING TERMS - ACCOUNTING DICTIONARY - ACCOUNTING GLOSSARY
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Accounting Terms DEBTOR DAYS is a ratio used to work out how
many days on average it takes a company to get paid for what it
sells. It is calculated by dividing the figure for trade debtors
shown in its accounts by its sales, and then multiplying by 365.
OPERATIONAL GEARING is the higher the proportion of fixed costs
relative to variable operating costs, the higher the operational
gearing. This results in greater business risk. A retailer has
high fixed costs relative to variable costs, so has a lot of
business risk. See GEARING and FINANCIAL GEARING.