4. Financial ratios in the forecasting process

Your boss has asked you to take a closer look at your companys credit policies. You have been given the following information:

Accounts receivable balance:	$715,000
Average daily sales:	$13,450
Weighted average cost of capital:	11%

Your firms days sales outstanding (DSO) is ____ .

Your boss is unhappy with your companys DSO and wants to bring it down to the industry average of 25 days. The marketing department told you that they expect sales to grow by 16% next year. This means that your company can expect to have an accounts receivable balance of ___ next year.