Working Capital Question
Should DSOs be projected based on gross or net revenue and why? Thank you.
Should DSOs be projected based on gross or net revenue and why? Thank you.
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Gross revenue. When you analyze accounts receivable as a function of how much revenue was made, you don't anything else to dilute the real value behind the revenue the company is incurring. It would be misleading and transgress from the purpose of projection days sales, days inventory, etc.
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