Nicholas Would Like to Improve the Management of His Company's

question 22

Multiple Choice

Nicholas would like to improve the management of his company's accounts payable.One metric he might find useful is:

• A)days in credit.
• B)days in inventory.
• C)days in payables.
• D)days sales outstanding.

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Definitions:

Depreciation

The process of allocating the cost of a tangible asset over its useful life, representing how much of the asset's value has been used.

Operating Activities

Day-to-day actions that are involved in running a business, which include production, sales, and material purchasing, related to the company's core business operations.

Return on Equity

Return on Equity (ROE) measures the rate of return that the owners of common stock of a company receive on their shareholdings, reflecting the efficiency with which their capital is utilized.

Equity Ratio

A financial ratio indicating the relative proportion of shareholders' equity used to finance a company's assets.