How to calculate the opportunity cost of accounts receivable?

Calculation method of opportunity cost:

1, the first method: by sales volume.

According to the formula: funds occupied by accounts receivable = daily sales × average cash withdrawal period.

Opportunity cost of accounts receivable = capital occupied by accounts receivable × capital cost rate;

Opportunity cost of accounts receivable = daily sales × average cash withdrawal period × capital cost rate.

2. The second method: calculated according to the variable cost of sales.

Opportunity cost of accounts receivable:

Daily sales * variable cost rate * average collection period * capital cost rate

Accounts receivable occupied funds = daily sales * variable cost rate * average payment period.

Extended data

Characteristics of opportunity cost:

1. Opportunity is optional.

Opportunity cost refers to the opportunities that decision makers can choose. If it is not a project that decision makers can choose, it is not an opportunity for decision makers. For example, if a farmer can only raise pigs and chickens, then raising cattle will not be an opportunity for a farmer.

2. The opportunity cost is profitable.

The project with the highest income among abandoned opportunities is opportunity cost, that is, opportunity cost is not the sum of the income of abandoned projects. For example, a farmer can only choose between raising pigs, chickens and cows, if the income relationship between them is cattle >; Raising pigs > raising chickens, the opportunity cost of raising pigs and raising chickens is raising cattle, and the opportunity cost of raising cattle is only raising pigs.

3. Opportunity cost and scarcity of resources

Choosing one thing in a scarce world means giving up other things. The opportunity cost of choice is the value of the abandoned goods or services. Opportunity cost refers to the maximum income that can be obtained by using a certain resource to produce a certain product under the condition of limited resources.

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