Conceptually, What Does the Days' Sales in Receivables Ratio Measure

question 257

Multiple Choice

Conceptually, what does the days' sales in receivables ratio measure for a firm?

• A) The number of days it takes to generate dollar sales equal to the outstanding accounts receivable balance.
• B) The number of days it takes on average for customers to pay their bills.
• C) The number of days it takes for a firm to pay its bills assuming no new payables are created.
• D) The number of times during the year a firm collects and relends its receivables.
• E) The number of days it takes before the firm's working capital becomes negative.

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Definitions:

Keynesian Range

A portion of the Keynesian aggregate supply curve where total production is influenced by changes in aggregate demand, leading to fluctuations in output and employment levels.

Aggregate Demand

Aggregate demand represents the total demand for goods and services within a specified economy at a given overall price level and in a given time period.

Determinant of Employment

Factors that influence the hiring decisions of employers and the availability of jobs within an economy.

Demand Creates

The assertion that consumer demand drives the production and supply of goods and services in the market.