dec 2012, q 3c

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August 11, 2016 at 3:03 pm #332722
ambrish
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Hello sir,

Could you please explain me on how 128500 is calculated when receivables days are reduced to 30?

Thanks in advance
August 12, 2016 at 6:22 am #332797
Ken Garrett
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Sales revenue per day = 1,600,000/365 = 4,383.56

Reducing collection from 59.31 to 30, means that cash from 29.31 days of sales is received earlier.

4383.56 x 29.31 = 128,482 or 128500 when rounded.
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