Question

Refer to the data for Pettijohn Inc. What is the firm's days sales outstanding? Assume a 360-day year for this calculation. 1) 48.17 2) 50.71 3) 53.38 4) 56.19 5) 59.14

Answer 1

The firm's days sales outstanding (DSO) is 59.14 days. The Option 5 is correct.

What is the firm's days sales outstanding?

The firm's Days Sales Outstanding (DSO) is a financial metric that measures the average number of days it takes for a company to collect payments from its customers after a sale.

DSO = (Accounts Receivable / Net Sales) * 360

Accounts Receivable = 9,660

Net Sales = $58,800.0

DSO = (9,660.0 / 58,800.0) * 360

= 59.1428571429

= 59.14 days

Therefore, the firm's days sales outstanding (DSO) is 59.14 days.

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