Which of the Following Statements Is CORRECT

question 62

Multiple Choice

Which of the following statements is CORRECT?

• A) If a firm increases its sales while holding its accounts receivable constant, then, other things held constant, its days' sales outstanding will decline.
• B) If a security analyst saw that a firm's days' sales outstanding (DSO) was higher than the industry average and was also increasing and trending still higher, this would be interpreted as a sign of strength.
• C) If a firm increases its sales while holding its accounts receivable constant, then, other things held constant, its days' sales outstanding (DSO) will increase.
• D) There is no relationship between the days' sales outstanding (DSO) and the average collection period (ACP).These ratios measure entirely different things.
• E) A reduction in accounts receivable would have no effect on the current ratio, but it would lead to an increase in the quick ratio.

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Definitions:

Marketspace Opportunity

Prospects for business growth and development within online or digital marketplaces, driven by changing consumer behaviors and technological advancements.

Communication Capabilities

The range of technologies, platforms, and methodologies available to individuals or organizations to convey information effectively.

Marketspace Opportunity

Potential for growth and profit in the digital or online marketplace.

Price Utility

The perceived value or satisfaction a consumer derives from purchasing a product at a given price.