Directions, Formulas and Definitions for completion of the NSDTR:
Standard Industrial Classification Code (SIC): A 4-digit code developed by the Office of Management and Budget of the Executive Office of the President to define industries in accordance with the composition and structure of the economy. If your company has more than one SIC code, use the one that is most descriptive for your business. If separate receivable statistics are maintained for individual business divisions, complete a separate calculation for each SIC code.
Credit Sales: Actual billings include freight, taxes, and containers; not the sales shown in the accounting records where such items are excluded.
Trade Receivables: All domestic open accounts and notes for current billings, deferred billings or datings, past-due billings, suspense accounts, charge backs, and accounts placed for collections. Where receivables are sold to a captive finance company, give the experience of the captive company. If only a portion of the receivables are sold, include receivables of both parent and captive. Companies with leasing agreements should report only the portion of those leases that have been billed.
Current Trade Receivables: Portion of domestic open accounts and notes not yet due.
Average Trade Receivables Beyond 90 Days: Monthly average of trade receivables 90 days or more past due (Aged on actual due date).
Collection Effectiveness Index (CEI):
Use beginning quarterly A/R and end of quarter A/R
CEI = Beginning total receivables + (quarterly credit sales/3) – ending total receivables x 100
Beginning total receivables + (quarterly credit sales/3) – ending current receivables
CEI = $12,327,157 + ($47,881,064/3) – $13,663,598 x 100 = 71.54
$12,327,157 + ($47,881,064/3) – $7,846,547
Days Sales Outstanding (DSO):
DSO = Last three month ending total receivable balance x 30 divided by Credit Sales for Quarter
DSO = ((($16,935,357 + $17,936,658 + $13,663,598) x 30) / $47,881,064) = 30.41
Best Possible DSO:
BPDSO = Last three month ending current receivable balance x 30
Credit Sales for Quarter
BPDSO = $8,398,365 + $7,698,687 + $7,846,547 x 30 = 15.00
Percent of Trade Receivables over 91 Days Past Due:
Percent over 91 days past due = Average Receivables over 91 days
Average Total Receivables
As a participant in CRF’s quarterly NSDTR survey you will receive a complimentary copy of the report.