Bakers Broterhs has DSO of 40 days, and its annual sales are $7,300,000. What is its accounts receiveable balance. Assume that it uses a 365 day year.

Quote:

---

Originally Posted by meandyou24

Bakers Broterhs has DSO of 40 days, and its annual sales are $7,300,000. What is its accounts receiveable balance. Assume that it uses a 365 day year.

---

what is a DSO? Please don't invent your own abbreviations. I expect your question actually translates to what proportion of annual sales are contained in receivables if the terms of trade are payment in 40 days. I have no intention of converting this to an equation

Quote:

---

Originally Posted by paraclete

what is a DSO? ... I expect your question actually translates to what proportion of annual sales are contained in receivables...

---

You got it; it's shorthand for "days sales outstanding" and its computation would be more apparent if it had the more descriptive name "number of average daily sales contained in receivables".

(I suppose NOADSCIR doesn't sound quite as cool, but at least no one would think we're talking about the Detroit Symphony Orchestra.)

Me'N'U24, I'll bet you can take my expanded title of the metric and deduce the answer to your question. Have a go at it.

Quote:

---

Originally Posted by ArcSine

Me'N'U24, I'll bet you can take my expanded title of the metric and deduce the answer to your question. Have a go at it.

---

Exactly!