Data on Nathan Enterprises for the Most Recent Year Are

question 61

Multiple Choice

Data on Nathan Enterprises for the most recent year are shown below,along with the days sales outstanding of the firms against which it benchmarks.The firm's new CFO believes that the company could reduce its receivables enough to reduce its DSO to the benchmarks' average.If this were done,by how much would receivables decline? Use a 365-day year.
Sales
$110,000
Accounts receivable
$16,000
Days sales outstanding (DSO)
53) 09
Benchmark days sales outstanding (DSO)
20) 00

• A) $8,078
• B) $8,975
• C) $9,973
• D) $10,970
• E) $12,067

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Definitions:

Financing Activities

Transactions related to raising capital and repaying investors, affecting the company's equity and long-term debt.

Free Cash Flow

The amount of cash generated by a business after accounting for capital expenditures, essential for maintaining or expanding assets.

Operating Activities

Transactions and events that relate to the principal revenue-generating activities of the company.

Financing Activity

Transactions that result in changes to the size and composition of the equity capital or borrowings of a company, as reported in the cash flow statement.