When evaluating the days' sales uncollected ratio,generally the less time that money is tied up in receivables often translates into increased profitability.

Question

Quizplus · Accepted Answer

The days' sales uncollected ratio measures the average number of days it takes for a company to collect its accounts receivable. A shorter collection period means that money is not tied up in unpaid invoices, which increases the company's cash flow and liquidity. Improved cash flow and liquidity can lead to increased profitability as the company has more resources and flexibility to invest in growth opportunities, pay off debts, or return profits to shareholders.

When Evaluating the Days' Sales Uncollected Ratio,generally the Less Time