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    waylene's Avatar
    waylene Posts: 6, Reputation: 1
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    #1

    Apr 28, 2007, 09:06 AM
    Bill Payment
    If a firm pays it bills with a 30-day delay, what fraction of its purchases will be paid for in the current quarter? In the following quarter? What if its payment delay is 60-days?

    Can anyone tell me how to start this? I'm sure it's an equation but I can't wrap my arms around where to even start.
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #2

    Apr 28, 2007, 01:13 PM
    There are 4 quarters in the year.

    So if you don't pay until the next month... (30 day delay)

    Then you only pay for 2 months out of 3... (3 months to a quarter x 4 quarters = 12 months)

    So 1/3 of purchases in the quarter are not paid in the quarter at 30 days.

    2/3 of purchases in the quarter are paid in this quarter at 30 days.

    For 60, that just adds another month to the future.
    So, this quarter 1/3, next quarter 2/3
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