Current Receivable Turnover

Sales / Receivables 6.875

Current DSO
365 days / Recevable Turnover 53.09

We need to work back starting from the desired DSO which is 20.00

1st step Get the required Receivable Turnover based on the desired DSO
365 days / DSO = Receivable Turnover

365 days / 20 DSO = 18.25 Receivable Turnover

2nd Step Get the required receivable balance based on the required Receviable Turnover

Sales / Receivable Turnover

110000 / 18.25 ₱ 6,027.40

Current Receivable ₱ 16,000.00

Desired Receivable to ₱ 6,027.40
get the desired DSO

Decline in Receivable ₱ 9,972.60