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A Business with Days' Sales in Receivables of 39 Days

question 104

True/False

A business with days' sales in receivables of 39 days is more liquid than one with a collection period of 31 days.


Definitions:

Market Price

The market value at which a service or asset is currently traded.

Call Option

A financial contract that gives the buyer the right, but not the obligation, to buy a specified quantity of an asset at a set price within a specified time.

Strike Price

The rate at which an option's owner has the right to purchase (for a call option) or offload (for a put option) the underlying asset or commodity.

Market Price

The current price at which an asset or service can be bought or sold.

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