If a firm's sales and those of its customers are closely correlated with economic conditions,it is possible for the firm's total investment in accounts receivable to decline while its DSO increases.

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If economic conditions decline, the firm's customers may have difficulty paying their bills, leading to an increase in DSO (days sales outstanding). However, if the firm is also experiencing a decline in sales due to the economic conditions, the total investment in accounts receivable may actually decrease, despite the increase in DSO. This could happen if the firm is extending less credit to customers or if the average size of the firm's accounts receivable is decreasing.

If a Firm's Sales and Those of Its Customers Are