Data on Shick Inc. for 2008 are shown below, along with the days sales

QUESTION

Data on Shick Inc. for 2008 are shown below, along with the days sales outstanding of the firms against which it benchmarks. The firms new CFO believes that the company could reduce its receivables enough to reduce its DSO to the benchmarks average. If this were done, by how much would rec¦
The formula for calculating the Days sales outstanding is DSO = (Accounts receivables / Creidit sales) * 365 days 20.00 = (AR / $94,000) * 365 0.055 = AR / $94,000 AR = $5151 Therefore, the¦

accounts receivables should be $5151 to reach the benchmark. Accounts receivables to be declined is ($16,000 “ $5151 = $10,849)

ANSWER:

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