The days' sales in receivables ratio gives an indication of the length of time that the receivables have been outstanding at the end of the year.This indication can be misleading if sales are seasonal and/or the company uses a natural business year.

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The statement is true. If a company's sales are uneven throughout the year or if they use a non-calendar year for business purposes, then the days' sales in receivables ratio may not accurately reflect the actual length of time that receivables have been outstanding. In such cases, additional analysis and adjustments may be necessary to get an accurate picture of the company's receivables turnover.

The Days' Sales in Receivables Ratio Gives an Indication of the Length