Explain how a new firm’s receivables balance is built up over time.
Define days sales outstanding (DSO). What can be learned from it? How is it affected by sales fluctuations?
What is an aging schedule? What can be learned from it? How is it affected by sales fluctuations?
A company has annual sales of $730 million. If its DSO is 35, what is its average accounts receivables balance? ($70 million)