A company has net income of $185,000, a profit margin of 10.00 percent, and an accounts receivable balance of $106,834. Assuming 72 percent of sales are on credit, what is the company's days' sales in receivables?
Total sales = Net income / profit margin
Total sales = 185,000 / 0.1
Total sales = 1,850,000
Credit sales = 72% of 1,850,000 = 1,332,000
Receivables turnover = Net credit sales / receivables
Receivables turnover = 1,332,000 / 106,834
Receivables turnover = 12.4679
Days in sales = 365 / receivables turnover
Days in sales = 365 / 12.4679
Days in sales = 29.28
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