About Average Daily Float Calculator (Formula)
The Average Daily Float Calculator is a tool used to calculate the average daily float based on the total value of checks and other negotiable instruments in process, and the total number of days in the period. The average daily float represents the average amount of money held in transit or unavailable during a specific time frame.
The formula used to calculate the average daily float is as follows:
Average Daily Float (ADF) = Value of Checks / Total Days
In this formula, the value of checks and other negotiable instruments in process is measured in dollars ($), and the total days in the period represent the number of days.
For example, if the total value of checks in process is $10,000 and the total days in the period is 30, the average daily float can be calculated as:
Average Daily Float = $10,000 / 30 = $333.33 per day
Therefore, in this example, the average daily float would be approximately $333.33 per day.
The Average Daily Float Calculator simplifies this calculation process, allowing users to quickly determine the average daily float based on the provided values. It is commonly used in financial analysis, cash management, and budgeting to assess the impact of delays in fund availability and optimize cash flow management.