Suppose that a clinic has third-party payer revenues of $10,000 a day. On average, it takes the clinic 50 days to collect from its payers. What will be the steady state receivables balance?
a. $ 10,000
b. $ 50,000
c. $250,000
d. $500,000
e. $750,000
50,000
50000
To calculate the steady state receivables balance, we need to determine the average amount of money owed to the clinic at any given time.
First, we need to find the average amount of daily third-party payer revenue. This can be done by dividing the total third-party payer revenues by the number of days it takes to collect the payments:
Average daily third-party payer revenue = $10,000 / 50 days
Average daily third-party payer revenue = $200
Next, we need to determine the steady state receivables balance, which is the average amount of money owed to the clinic at any given time. This can be calculated by multiplying the average daily revenue by the number of days it takes to collect payments:
Steady state receivables balance = Average daily third-party payer revenue * Number of days to collect
Steady state receivables balance = $200 * 50 days
Steady state receivables balance = $10,000
Therefore, the steady state receivables balance is $10,000.
The correct answer is a. $10,000.