Average Daily Float Calculator

Formula

To calculate the Average Daily Float ($ADF$):

\[ ADF = \frac{VC}{D} \]

Where:

$ADF$ is the Average Daily Float ($/day)
$VC$ is the total value of checks and other negotiable instruments in process ($)
$D$ is the total days in the period

What is Average Daily Float?

The Average Daily Float is a measure of the total value of checks and other negotiable instruments that are in the process of being cleared over a given period, divided by the number of days in that period. This metric is used to estimate the average daily amount of money that is tied up in the float, which can help in managing cash flow and liquidity.

Example Calculation 1

Let's assume the following values:

Total Value of Checks and Instruments in Process ($VC$) = $100,000
Total Days in the Period ($D$) = 10 days

Using the formula:

\[ ADF = \frac{100,000}{10} = 10,000 \]

The Average Daily Float is $10,000 per day.

Example Calculation 2

Let's assume the following values:

Total Value of Checks and Instruments in Process ($VC$) = $250,000
Total Days in the Period ($D$) = 25 days

Using the formula:

\[ ADF = \frac{250,000}{25} = 10,000 \]

The Average Daily Float is $10,000 per day.