QUESTION 12 The days sales outstanding tells us how long it takes, on average, to collect...
QUESTION 12
The days sales outstanding tells us how long it takes, on average, to collect after a sale is made. The DSO can be compared with the firm's credit terms to get an idea of whether customers are paying on time.
True False
QUESTION 1
Other things held constant, the more debt a firm uses, the lower its operating margin will be.
True
False
Homework Answers
| Q12. | ||||||
| Answer is TRUE. | ||||||
| DSO suggests number of days sales outstanding with Accounts receivable. | ||||||
| Q13. | ||||||
| Answer is TRUE. | ||||||
| The more the debts, the higher will be the interest expense which is deducted from gross margin to compute the operating margin. | ||||||
| hence, operating margin will be lowered down. | ||||||
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QUESTION 12
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