Average net receivables

Average net receivables is the multi-period average of accounts receivable ending balances, netted against the average allowance for doubtful accounts for the same periods. The formula is:

(Net receivables for current period + Net receivables for preceding period) / 2

The concept is used in a number of liquidity ratios, and is intended to smooth out any unusual spikes or drops in the ending receivables balance in the current period.