Suppose a company has a days sales outstanding (DSO) that is considerably higher than its industry average. If the company could reduce its accounts receivable to the point where its DSO was equal to...


Suppose a company has a days sales outstanding (DSO) that is considerably higher than its
industry average. If the company could reduce
its accounts receivable to the point where its
DSO was equal to the industry average without
affecting its sales or its operating costs, how
would this affect (a) its free cash flow, (b) its
return on common equity, (c) its debt ratio,
(d) its times-interest-earned ratio, (e) its EBITDA
coverage ratio, (f) its price/earnings ratio, and
(g) its market/book ratio?



Jun 04, 2022
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