An increase in which of the following ratios is considered unfavorable?
A) Interest coverage ratio
B) Cash flows to assets
C) Quick ratio
D) Days' sales uncollected

Question

Quizplus · Accepted Answer

An increase in days' sales uncollected ratio, which measures the average number of days it takes a company to collect its accounts receivable, is considered unfavorable as it indicates that the company is taking longer to collect its payments from customers, which can lead to cash flow problems. The other ratios listed are all favorable when they increase.

An Increase in Which of the Following Ratios Is Considered