_____ Measures How Long It Takes for a Firm to Receive

question 160

Multiple Choice

_____ measures how long it takes for a firm to receive payment from customers who buy on credit.

• A) The current ratio
• B) The average collection period
• C) The debt-to-asset ratio
• D) Return-on-equity

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Definitions:

Rate of Return

The earnings or losses experienced with an investment over a specific duration, depicted as a percentage of the investment's original expense.

Net Asset Value

The total value of all the securities held by a mutual fund or ETF, minus any liabilities, divided by the number of shares outstanding.

Year-End Assets

The total value of all assets an entity owns at the end of an accounting period or fiscal year.

Liabilities

Financial obligations or debts a company owes to outside parties, which must be settled over time through the transfer of economic benefits.