N 16 Supply Chains and Working Capital Management Effective credit management involves establishing credit standards for extending credit to customers, determining the company's terms of credit, and setting up procedures for invoicing and collecting past-due accounts. The following statement refers to a credit management policy. Select the best term to complete the sentence. The minimum financial strength a customer must have to be granted credit is indicated by the company's Consider the case of Tan Co.: Tan Co.'s CFO has decided to take a closer look at the company's credit policy. Tan Co. has annual sales of $402.8 million, and it currently has an accounts receivable balance of $46.3 million. The first step in analyzing the firm's credit policy is to determine its days sales outstanding (DSO). Based on this information, Tan Co.'s DSO is . (Note: Use 365 days as the length of a year in all calculations. Do not round intermediate calculations. Round your answer to one decimal place.) The average DSO for Tan Co.'s industry is 51.7 days. Assuming that its sales stayed the same, what would be Tan Co.'s receivables it maintained the industry average DSO? (Note: Do not round intermediate calculations. Round your answer to the nearest whole dollar.) W 16 Supply Chains and Working Capital Management Based on this information, Tan Co.'s DSO is . (Note: Use 365 days as the length of a year in all calculations. Do not round intermediate calculations. Round your answer to one decimal place.) The average DSO for Tan Co.'s industry is 51.7 days. Assuming that its sales stayed the same, what would be Tan Co.'s receivables balance it maintained the industry average DSO? (Note: Do not round intermediate calculations. Round your answer to the nearest whole dollar.) enforce its credit policy, it would reduce its DSO to 30 days; however, this will cause Tan Co. to lose 4% of its sales revenue. What would Tan Co.'s expected accounts receivables balance be if it decides to tighten its credit policy? (Note: Do not round intermediate calculations. Round your answer to the nearest whole dollar.)