In Closely Held Family Firms (Those That Are Not Publicly

question 54

True/False

In closely held family firms (those that are not publicly traded on stock exchanges), most CEOs arrange for the business to be sold following their retirement or death.

---

Definitions:

Operating Cycle

The duration between the purchase of inventory by a business and the receipt of cash from accounts receivable, indicating the speed at which a company turns inventory into cash.

Equity Multiplier

A financial ratio that measures a company's leverage by comparing its total assets to its total equity.

Year 2

The second year in a specified timeframe, often used in financial and performance analysis.

Average Collection Period

A financial metric indicating the average number of days it takes for a company to receive payments owed by its customers.