Which of the Following Statements Regarding the Effects of a Business

question 13

Multiple Choice

Which of the following statements regarding the effects of a business decision on a financial ratio is true?

• A)If a company is expanding its facilities,its fixed asset turnover ratio is likely to fall temporarily.
• B)If a company extends its payment period for customers,its accounts receivable ratio is likely to rise.
• C)If a company eases its credit granting policies,its days to collect ratio is likely to fall.
• D)If a company builds up inventories,its days to sell ratio is likely to fall.

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Definitions:

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