A company reports 2014 revenues of $5 billion, 2013 accounts receivable of $400 million, and 2014 accounts receivable of $600 million. What are the days sales outstanding (DSO) for this company?

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Multiple Choice

A company reports 2014 revenues of $5 billion, 2013 accounts receivable of $400 million, and 2014 accounts receivable of $600 million. What are the days sales outstanding (DSO) for this company?

DSO measures how long, on average, it takes to collect accounts receivable. To calculate it, use the average accounts receivable for the period, which comes from the beginning and ending balances: (400 million + 600 million) / 2 = 500 million. Next, find the average daily sales by dividing annual revenue by the number of days in the year: 5 billion / 365 ≈ 13.698 million per day. Finally, DSO = 500 million / 13.698 million per day ≈ 36.5 days.

A company reports 2014 revenues of $5 billion, 2013 accounts receivable of $400 million, and 2014 accounts receivable of $600 million. What are the days sales outstanding (DSO) for this company?

Prepare for your Financial Statement Modeling Test. Utilize flashcards and multiple choice questions with detailed explanations. Ace your exam with thorough preparation!

A company reports 2014 revenues of $5 billion, 2013 accounts receivable of $400 million, and 2014 accounts receivable of $600 million. What are the days sales outstanding (DSO) for this company?

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