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An equipment manufacturer sells the same products in two different territories. The general manager gathers liquidity metrics for those two territories: Territory 1 Territory 2
An equipment manufacturer sells the same products in two different territories. The general manager gathers liquidity metrics for those two territories: Territory 1 Territory 2 Days sales outstanding (DSO) 33 31 Days of inventory on hand (DOH) 42 44 Days payable outstanding (DPO) 65 62 Which of the following is the most appropriate interpretation of this data? Territory 1, on average: A has higher inventory turnover. B has a longer net operating cycle. C pays its suppliers faster on credit purchases.
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