All Other Things Equal,the Higher the Return on Equity Ratio

question 55

True/False

All other things equal,the higher the Return on Equity ratio the better the financial performance of the company.

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Definitions:

Investment In Receivables

The funds tied up in the credit sales of a company, indicating the amount of money owed by customers for goods or services delivered on credit.

Credit Sales

Sales in which the customer is allowed to purchase goods or services with an agreement to pay at a later date.

Average Collection Period

The mean duration required for a company to collect payments due from its clients.

Credit Period

The length of time that credit is granted.