Two financial ratios: creditor days and debtor days

Written on 08 March 2015. Posted in Developing managerial skills

There are some financial ratios we should pay attention to when monitoring the operating efficiency of our business. Two important ratios are the following ones:

Creditor days = (creditors/cost of goods sold) x 365 days. This ratio indicates how many days on average it takes us to pay our suppliers.

Debtor days = (debtors/cost of goods sold) x 365 days. This ratio indicates how many days on average it takes our customers to pay us.

Ideally our creditor days should be a bigger number than our debtor days. In fact, the highest level of efficiency is reached when the cash received from customers' payments comes in and is invested before it goes out again for paying suppliers. Another advantage is that we won't risk to annoy suppliers because of late payment.

Practically we should try to set payment terms which are favourable to us and our cash flow, in relation to both suppliers and customers, so as to preserve our liquidity.

Rethinking the Adaptive Leadership model through the Italian Adaptive Leadership Behavior Questionnaire

Since Heifetz designed the adaptive leadership framework in 1994, the academic literature has benefitted from many qualitative research studies focusing on specific adaptive challenges and how the adaptive leadership framework can be practically used to face these. It seems very few have dealt with adaptive leadership through the quantitative lens and have attempted to measure adaptive leadership behaviors or tested Heifetz’s adaptive leadership six-dimensional model. In response, my PhD research aimed to measure the perception of adaptive leadership behaviors across the Italian corporate context and to investigate whether Heifetz’s adaptive leadership model can apply to the Italian culture. Findings and contribution to knowledge can be read in the thesis: Novellini, P. (2023) Rethinking the Adaptive Leadership model through the Italian Adaptive Leadership Behavior Questionnaire, PhD thesis, University of Sunderland.

Download pdf

Novellini - Hall Italian Adaptive Leadership Behavior Questionnaire

Do you want to measure the perception of adaptive leadership within your company or team? You can use 'Novellini - Hall Adaptive Leadership Behaviour Questionnaire', a new tool in the literature of leadership. This questionnaire was designed especially to be used in the business environment with a perspective on the higher level figures in the hierarchy. However, you can use it in any type of environment and at any level by adapting the terminology to the reality you want to focus on.

Download pdf

PAOLA NOVELLINI

English for Work

20063 Cernusco sul Naviglio (Milan - Italy)
Phone No. +39 327 7567601

VAT ID IT05862700969