A Company's Ratio of Net Sales (Cash and Credit Sales)to

question 50

Multiple Choice

A company's ratio of net sales (cash and credit sales) to average accounts receivable can be interpreted as management's ability to:

• A)Collect cash from all sales to customers.
• B)Effectively market its products and services.
• C)Generate profits for investors.

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Definitions:

Total Surplus

The sum of consumer surplus and producer surplus in a market, representing the total net benefit to society from the production and consumption of goods and services.

Equilibrium

A state in which market supply and demand balance each other, resulting in stable prices and quantities.

Positively Sloped

A line or curve on a graph that moves upward and to the right, indicating a direct relationship between two variables.

Negatively Sloped

Describes a line on a graph that moves downward from left to right, indicating an inverse relationship between two variables.