Operating cycle: Le Baron Company, a men's designer company, has an operating cycle of 123 days. The company's days' sales in inventory is 73 days. How much does the company have in receivables if it has credit sales of $433,450? Round to the nearest dollar.

Question

Quizplus · Accepted Answer

The operating cycle is the sum of days' sales in inventory and days' sales outstanding (receivables period). With an operating cycle of 123 days and inventory days of 73, the receivables period is 123 - 73 = 50 days. Receivables = (Credit Sales / 365) * Receivables Period = ($433,450 / 365) * 50 = $59,377.

Operating Cycle: Le Baron Company, a Men's Designer Company, Has