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Question Description

Part 1

Write: Make sure your response addressing the following question is more than 200 words and includes an in-text citation or a brief quote from the reading material where appropriate. You may want to review the Citing Within Your Paper (Links to an external site.) resource from the Ashford Writing Center for proper use of citations.

Companies monitor factors such as days sales outstanding (DSO) and inventory levels to assess its ability to collect cash quickly from a potential customer. In your post,

  • Discuss the financial ratios a firm can use to measure the time it will take to collect cash from a potential customer on average.
  • Show how the ratios are computed, and explain how each works.
  • Elaborate on why this is important to a business.

Part 2

Write: Make sure your response addressing the following question is more than 200 words and includes an in-text citation or a brief quote from the reading material where appropriate. You may want to review the Citing Within Your Paper (Links to an external site.) resource from the Ashford Writing Center for proper use of citations.

Why would a company be willing to sell its accounts receivable at a discounted amount (i.e., the amount received from the buyer is less than the recorded amount)? Give at least three reasons and explain why.