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:

Interference

The act of hindrance or obstruction in a process, causing a disruption in a desired outcome.

Mutual Understanding

A state of agreement or shared perspectives achieved through effective communication and empathy between parties.

Group Level

A reference to the collective characteristics or dynamics of a group as opposed to individual members.

Project Team

A group of individuals with diverse skills and roles assembled to execute a specific project, achieving defined goals over a set timeframe.