1. Avg.

Number of Days Receivables Outstanding

Company 2008 2009 2010 2011 2012

APEX 60 60 38 38 44
Spinning &
Knitting
Mills Limited

Square 202 159 138 128 136

Textile
Limited

Metro 184 179 193 232 221

Spinning
Limited

It measures the effectiveness of the firm’s credit policy. It indicates the level of investment in
receivables needed to maintain the firm’s sales level.

APEX Spinning & Knitting Mills Limited:

We can see that average number of days receivable outstanding was 60 in both the year 2008 and
2009 and it was the highest average receivable days. Then it was decreased and again constant in
2010 and 2011. In 2012 the number of days increased slightly to 44 from 38.