The Days Sales Outstanding (DSO) Ratio of a Firm Identifies

question 91

Multiple Choice

The days sales outstanding (DSO) ratio of a firm identifies:

• A)the average length of time a firm must wait after making a credit sale before receiving cash.
• B)how effectively the firm uses its plant and equipment to help generate sales.
• C)the extent to which a firm's net operating income can safely decline.
• D)the profit (earnings) per dollar of sales.
• E)how much investors are willing to pay for the firm's stock for each dollar of reported profits.

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Definitions:

Consumer Protection Agency

A governmental organization dedicated to safeguarding the rights and interests of consumers, often by enforcing laws against unfair business practices.

Federal Trade Commission

A United States federal agency established to prevent unfair business practices and protect consumers from anticompetitive, deceptive, and unfair business practices.

Technological

Pertaining to technology; involving, using, or relating to advancements or tools that apply scientific knowledge for practical purposes.

Sociocultural

Relating to the social and cultural aspects or factors that influence a society and its individuals.