Question: 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

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?

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DSO Days sales outstanding Receivablessales365 4380 a FC130 receivables sales365 Receivables 30 sales365 822 vs 12 Originally Difference 378 This would be an addition to FCF in the year the change was ... View full answer

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