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DebtorBorrower of money.DebtorA person or company owing money to another person or company. A company is therefore owed money by its debtors and the people it owes money to are its creditors.Similar MatchesDebtor nationDebtor nationA country whose assets owned abroad are worth less than the assets within the country that are owned by foreigners. Contrasts with creditor nation. Debtor in possession financingDebtor in possession financingNew debt obtained by a firm during the Chapter 11 bankruptcy process, Federal Bankruptcy Rule 4001 (c)(1). This financing is unique because it is secured, that is, it has priority over existing debt, equity and other claims. Debtor daysDebtor daysA ratio used to work out how many days on average it takes a company to get paid for what it sells. Calculated by dividing the figure for trade debtors shown in its accounts by its sales, and then multiplying by 365.E.g. A company with debtors of £700,000 and sales of £12m, takes an average 21.29 days to collect its debts.Obviously, the lower the number of debtor days, the better. An abnormally high figure suggests inefficiency, potential bad debts, window-dressing of the sales figures, or deliberate bullying by large customers trying to improve their own cash management. None of that is good news.Cash businesses, including most retailers, should have very low debt collection multiples, because they get their money at the same time as they sell the goods. The typical target for non-cash businesses will be 50-70 days. Debtor in possessionDebtor in possessionA firm that continues to operate under the Chapter 11 bankruptcy process. |
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