Chapter 17, Problem 7DQ

To determine

Concept Introduction:

Number of day’s sales uncollected or outstanding: It is an efficiency measure that measures a company’s average number days that it will take a company to collect payment after the sales has been made.

It is calculated as under –

$Days’SalesOutstanding=\frac{Accountsreceivables}{Netcreditsales}X365$

Its represents, how well a company is performing in collecting cash from its customers?

To discuss:

What does the number of day’s sales uncollected indicate?