Concept Introduction:
Days Sales uncollected: This is an efficiency ratio that indicates the period for which credit sales remain as receivable. The ratio is calculated by multiplying Accounts receivable by 365 days and dividing the result by Net Sales. The formula for Days Sales uncollected is as follows:
Requirement-a:
To calculate:
Change in the number of days sales uncollected between year 1 and Year 2
Concept Introduction:
Days Sales uncollected: This is an efficiency ratio that indicates the period for which credit sales remain as receivable. The ratio is calculated by multiplying Accounts receivable by 365 days and dividing the result by Net Sales. The formula for Days Sales uncollected is as follows:
Requirement-2:
If the company’s collection of receivables is improving.
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FUNDAMENTAL ACCOUNTING PRINCIPLES
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