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    meandyou24's Avatar
    meandyou24 Posts: 1, Reputation: 1
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    #1

    Jun 10, 2012, 02:41 PM
    Baker brothers has a DSO of 40 days, and its annual sals are $7,300,000 What is its
    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.
    paraclete's Avatar
    paraclete Posts: 2,706, Reputation: 173
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    #2

    Jun 10, 2012, 06:37 PM
    Quote Originally Posted by meandyou24 View Post
    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
    ArcSine's Avatar
    ArcSine Posts: 969, Reputation: 106
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    #3

    Jun 11, 2012, 03:35 AM
    Quote Originally Posted by paraclete View Post
    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.
    paraclete's Avatar
    paraclete Posts: 2,706, Reputation: 173
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    #4

    Jun 11, 2012, 05:22 AM
    Quote Originally Posted by ArcSine View Post
    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!
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