When evaluating the days' sales uncollected ratio, generally the less time that money is tied up in receivables the better.

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The days' sales uncollected ratio measures the average number of days it takes for a company to collect its accounts receivable. A lower ratio indicates that customers are paying their bills more quickly, which means that money is not tied up in receivables for as long. Therefore, it is generally better for the ratio to be lower.

When Evaluating the Days' Sales Uncollected Ratio, Generally the Less