The A/R turnover ratio increased significantly over a 2 year period. This trend could indicate that:
a. The A/R aging has deteriorated
b. The company has eliminates its discount policy
c. The company is more aggressively collecting customer accounts
d. Customer sales have substantially decreased
Ans: c. The company is more aggressively collecting customer accounts
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The relevant variable a financial manager uses to measure returns is
A) net income determined using generally accepted accounting principles. B) cash flows. C) dividends. D) earnings per share minus dividends per share.
A firm agrees to accept payments on a $1,000,000 loan with a fixed interest rate of 8% in exchange for making the payments on a loan with floating rate payments based on LIBOR
Payments are interest only with principal due in 10 years. The firm will benefit A) if LIBOR falls. B) if LIBOR rises. C) if Libor remains unchanged. D) if LIBOR fluctuates randomly.