Norfolk Co., Inc., an electronics and appliance chain, reported these figures in millions of dollars:

Requirements

1. Compute Norfolk’s days’ sales in receivables or days’ sales outstanding (DSO) during 2019. (For this exercise, use “net sales” for “net credit sales” when calculating ratios.)

2. Is Norfolk’s DSO long or short? Nico Networks takes 39 days to collect its average level of receivables. Divencenzo, the overnight shipper, takes 33 days. What causes Norfolk’s collection period to be so different?

Transcribed Image Text:

2019 2018 Net sales $398,500 3,860 $418,500 4,110 Receivables at end of year.