Management of Receivables and Payables (Example 2 and 3)

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July 11, 2014 at 6:08 pm #178647
dookhan12
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Hello…

I just need to clear something up.
In both example 2 and 3 in the workings part of the lecture…

You wrote “current receivables and new receivables.”
Is that you simply calculating the receivables days ratio?

and then

In order to calculate the average receivables, all you did was change the subject of the formula for the receivables days ratio.

Thanks!
July 12, 2014 at 6:28 am #178696
John Moffat
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I do not really understand what you mean.

In order to calculate both the old and the new receivables, I first calculated the average receivables days and then used that to calculate the average receivables.

Calculating the receivables days was part of the workings in order to be able to calculate the average receivables.
July 13, 2014 at 2:16 am #178758
dookhan12
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Yep. You confirmed exactly what I was looking.

Thanks! 🙂
Sorry for poor wording….
July 16, 2014 at 6:51 am #178964
John Moffat
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No problem – I am pleased that it is sorted out 🙂
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