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In: Finance

True/False - The quick ratio is a measure of sales performace.(T/F) - It is best to...

True/False

- The quick ratio is a measure of sales performace.(T/F)

- It is best to reduce cash holdings when attempting to increase the valuation of a company. (T/F)

- A repeat customer usually deserves credit terms considerations. (T/F)

- International customers usually are more reliable payers and should receive better credit terms. (T/F)

- The credit decision can assist in increasing sales revenue. (T/F)

- Reducing DPO is a source of cash for a company. (T/F)

- CCE(cash conversion effectiveness) measures the effectiveness of turning sales revenue into cash.(T/F)

- JIT has proven to be ineffective in most industries. (T/F)

- A new cash cycle begins when the cash is received from a customer's payment. (T/F)

Solutions

Expert Solution

True or False with explanation:

- The quick ratio is a measure of sales performace. - F (it tells liquidity exellence)

- It is best to reduce cash holdings when attempting to increase the valuation of a company. - T (because application of cash increases the value of company assets)

- A repeat customer usually deserves credit terms considerations. -T (higher the credit more the sale)

- International customers usually are more reliable payers and should receive better credit terms. - T (because their payments are quaranted by one or other bank / credit agency.)

- The credit decision can assist in increasing sales revenue. - T (more the credit more sales would be)

- Reducing DPO is a source of cash for a company. - T (because dividend payment will reduce cash and retention creates cash sources)

- CCE(cash conversion effectiveness) measures the effectiveness of turning sales revenue into cash. - T (converting sales into cash is CCE)

- JIT has proven to be ineffective in most industries. - T (Because except manufacturing/heavy capital industries, in other industries the "just in time" concept doesn't prevails)

- A new cash cycle begins when the cash is received from a customer's payment. - T (purchase of materials / inputs begins a new cash cycle and ends with cash payments receiving from customers)

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jeff jeffy answered 2 years ago
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