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To: MMW who wrote (99381)2/15/1999 9:12:00 AM
From: Jurgen  Read Replies (1) | Respond to of 176387
 
Mike,

..My understanding of receivable is that the goods have been
delivered but the payment is not received...
That is correct

...Does the value of the goods has been counted as revenue?
Yes-if we are talking about trade receivables. But the trade receivables are not necessarily revenues of the current quarter.
Roughly you could say:
receivables as per end of quarter = receivables as per beginning of the quarter + sales - payments
There can be a hell lot of good or not so good reasons if receivables increase more than sales. Management needs to comment, the naked number doesn't tell you nothing
...2)The day sale outstanding is also a measurement of how company doing. The receivable is part of that calculation, or not?

Yes. The calculation is as follows:
MSO or MonthSalesOutstanding=receivables as per end of quarter/sales for the same quarter *3
DaysSalesOutstanding (DSO)=MSO*30
or, if you look at the financial year
MSO = receivables as per end of the year/annual sales *12
DaysSalesOutstanding (DSO)=MSO*30

again, management needs to comment if there is a change. For example, a large government deal with special payment terms can screw the numbers

hope that helps

Jurgen



To: MMW who wrote (99381)2/15/1999 12:20:00 PM
From: Chuzzlewit  Read Replies (1) | Respond to of 176387
 
Mike, revenue is the same as sales. It is the amount the customer has paid or must pay for the merchandise he has already received.

Days' sales outstanding (DSO) represents the receivables in terms of days of sales. It is simply A/R divided by Sales and multiplied by the number of days in the reporting period (either 91 for a quarter or 365 for the full year).

Hope this helps.

CTC


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