Question

The Holiday Corporation had sales of $450 million this year. Its accounts receivable balance averaged $30 million. How long, on average, does it take the firm to collect on its sales

Answer 1

24.3 days

Step-by-step explanation:

Calculation for How long, on average, does it take the firm to collect on its sales

Using this formula

Average collection period = (Accounts receivable / Credit sales) * 365 days

Let plug in the formula

Average collection period =$30 million/$450 million *365 days

Average collection period =24.3 days

Therefore How long, on average, does it take the firm to collect on its sales is 24.3 days