RECEIVABLES INVESTMENT Snider Industries sells on terms of 2/10, net 45. Total sales for the year are $1,500,000. Thirty percent of customers pay on the 10th day and take discounts, the other 70% pay, on average, 50 days after their purchases a) What is the DSO? receivables/ (sales/365) DSO b) What is the average amount of recievables? Sales per day Sales/365 Average receivables Sales per day x DSO c) What would happen to average receivables if Snider toughened its collection policy with the result that all non-discount customers paid on the 45th day? DSO Sales per day Sales/365 Average receivables Sales per day x DSO RECEIVABLES INVESTMENT Snider Industries sells on terms of 2/10, net 45. Total sales for the year are $1,500,000. Thirty percent of customers pay on the 10th day and take discounts, the other 70% pay, on average, 50 days after their purchases a) What is the DSO? receivables/ (sales/365) DSO b) What is the average amount of recievables? Sales per day Sales/365 Average receivables Sales per day x DSO c) What would happen to average receivables if Snider toughened its collection policy with the result that all non-discount customers paid on the 45th day? DSO Sales per day Sales/365 Average receivables Sales per day x DSO