Question
According to class lecture or the textbook which of the following is TRUE? (Read all the options before answering this question) If you own a
According to class lecture or the textbook which of the following is TRUE? (Read all the options before answering this question)
If you own a produce store that sell fresh fruit your inventory turnover should be very high like 365 times per year.
Assume you have credit terms 30 days, if you loosen up your credit and sell to customers who have a habit of not paying their bills, the Days Sales Outstanding (DSO) will increase to a much higher number than 30 days.
Generally, the higher the Times Interest Earned (TIE) ratio the better for creditors.
In Finance two things matter, Cash and Returns like Return on Assets and Return on Equity.
The DuPont Equation was initially developed by the DuPont Corporation to try to predict the probability of a company to file bankruptcy.
When doing ratio analysis, you should compare ratios with industry average and your main competitors.
When dealing with benchmarking, the goal is to be better than your competitors.
When dealing with ratios, most firms want to do better than average, so merely attaining average performance is not necessarily good. It is best to focus on the industry leaders ratios. Benchmarking helps in this regard.
All of the above are true
None of the above are true
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