Answer:
The days sales outstanding (DSO) ratio of the firm is 67 days.
Explanation:
In this question we use the formula of days sales outstanding which is shown below:
Day sale outstanding = Accounts receivable ÷ annual sales × total number of days in a year
where,
accounts receivable is $120 million
Annual sale is $650 million
And, we assume 365 days in a year
Now, put these values on the above equation.
So, the Days sales outstanding would be equal to
= $120 million ÷ $650 million × 365 days
= 0.184615 × 365 days
= 67 days
Hence, the days sales outstanding (DSO) ratio of the firm is 67 days.
