Select the correct statement: A. In managing the firm's accounts receivable, it is possible to increase credit sales per day yet still keep accounts receivable fairly steady, provided the firm can shorten the length of its collection period sufficiently. B. A firm that makes 90% of its sales on credit and 10% cash is growing at a constant rate of 10% annually. Such a firm will be able to keep its accounts receivable at the current level, since the 10% cash sales can be used to finance the 10% growth rate. C. Ceteris paribus, if a firm can shorten its days of sales outstanding, this will lead to a higher current ratio. E. Answer not given
Select the correct statement: A. In managing the firm's accounts receivable, it is possible to increase credit sales per day yet still keep accounts receivable fairly steady, provided the firm can shorten the length of its collection period sufficiently. B. A firm that makes 90% of its sales on credit and 10% cash is growing at a constant rate of 10% annually. Such a firm will be able to keep its accounts receivable at the current level, since the 10% cash sales can be used to finance the 10% growth rate. C. Ceteris paribus, if a firm can shorten its days of sales outstanding, this will lead to a higher current ratio. E. Answer not given
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Select the correct statement:
A. In managing the firm's accounts receivable, it is possible to increase credit sales per day yet still keep accounts receivable fairly steady, provided the firm can shorten the length of its collection period sufficiently.
B. A firm that makes 90% of its sales on credit and 10% cash is growing at a constant rate of 10% annually. Such a firm will be able to keep its accounts receivable at the current level, since the 10% cash sales can be used to finance the 10% growth rate.
C. Ceteris paribus, if a firm can shorten its days of sales outstanding, this will lead to a higher
E. Answer not given
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