If sales are US $400 per day, and customers pay in 30 days. 30 days of sales are outstanding, or US $120,000. Whether customers pay by credit card or cash collection requires 30 days.

Days' sales of receivables days' sales outstanding) equals the days in the year divided by the receivables turnover ratio net credit sales - average accounts receivable). Assuming sales are net credit sales and that ending accounts receivable equals average accounts receivable, the turnover ratio is 58 US $5,800 - $100), and the days' sales of receivables equals 6 days 365 - 58) rounded).