Dear Sir,
in the question Emile Gonzalez, trade receivable days were calculated as following: (260/1,600) x 365= 59 and it says that reducing trade receivable days to 30 days would release about $128,500. Could you please advise how $128,500 is calculated?
Thank you in advance
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Emile Gonzalez - Dec 2012 - Q3 - internal finance resources
10y ago#1260 represents 59.3125 days of receivables
Lowering the collection period from 59.3125 to 30 days ( a reduction of 29.3125) will lower receivables by 260 x 29.3125/59.3125 = 128.5.
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