Business FinancesQuestion 1193 of 1605
A contractor's accounts receivable total $180,000 and annual credit sales are $1,080,000. Roughly how many days does it take on average to collect (days sales outstanding)?
a.90 days
b.30 days
c.45 days
d.About 61 days
Explanation
Days sales outstanding = (accounts receivable / annual credit sales) x 365 = ($180,000 / $1,080,000) x 365 = 0.1667 x 365 = 61 days. Slow collection ties up cash.
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)