Suppose a company has a days sales outstanding (DSO) that is considerably higher than itsindustry average. If the company could reduceits accounts receivable to the point where itsDSO was equal to the industry average withoutaffecting its sales or its operating costs, howwould this affect (a) its free cash flow, (b) itsreturn on common equity, (c) its debt ratio,(d) its times-interest-earned ratio, (e) its EBITDAcoverage ratio, (f) its price/earnings ratio, and(g) its market/book ratio?
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