Diversification Initiatives Must Be Justified by the Creation of Value

question 1

True/False

Diversification initiatives must be justified by the creation of value for shareholders.

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Definitions:

Days To Collect

A financial metric that estimates the average number of days it takes a company to collect payment after a sale has been made, also known as the accounts receivable turnover in days.

Receivables

Money owed to a company by its customers or other parties for goods or services provided on credit, recorded as an asset on the balance sheet.

Quick Ratio

A liquidity measure that indicates a company's ability to cover its short-term liabilities with its most liquid assets.

Days Sales In Inventory

A financial metric indicating the average time it takes for a company to turn its inventory into sales, reflecting inventory management efficiency.