Suppose a company has a DSO that is considerably higher than its industry average. If the company

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Suppose a company has a 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 loan/EBITDA ratio,
(f) Its price/earnings ratio, and
(g) Its market/book ratio?

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
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