Question

A company has annual sales of $32,000 and accounts receivables of $2,200. The gross profit margin is 31.3%. The receivable days estimated from the data above is ______.

Answer 1

Answer: 80.17 days

Explanation:

The Receivable days estimated is calculated by the formula:

= Accounts receivable * 365 / (Annual sales * Gross profit margin)

= 2,200 * 365/ (32,000 * 31.3%)

= 2,200 * 0.03644169329

= 80.17 days