Why we multiblied by 360 instead of 365 in all equations??
in
Building a 3-Statement Model in Excel
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Calculating Historical DSO, DPO, DIO, Other assets %, and Other liabilities %
in the equation DIO , DPO, & DSO why we multiblied by 360 not 365 days in the year
2 answers ( 0 marked as helpful)
Because the financial year is made by 360 days (30*12). This helps businesses to calculate interests and other stuffs.
But don't most institutions use 365 to calculate for all of these equations?