47 | Assume U.S. GAAP (generally accepted accounting principles) applies unless otherwise noted. | |||||||||
An analyst gathered the following information for a company: | ||||||||||
Ratios | 2005 | 2004 | 2003 | |||||||
Inventory turnover | 5 | 6 | 7 | |||||||
Total asset turnover | 6 | 5 | 3 | |||||||
Accounts payable turnover | 9 | 9 | 8 | |||||||
Accounts receivable turnover | 11 | 12 | 15 | |||||||
All other factors being equal, which of the following is the best conclusion with respect to the information above? From 2003 to 2005, the company's: | ||||||||||
A. fixed asset turnover increased. | ||||||||||
B. credit policies became more strict. | ||||||||||
C. cash conversion cycle became shorter. | ||||||||||
D. average inventory processing time decreased. | ||||||||||
D.inventory turnover is lower means processing time increased.
C.$conversion cycle2003=365/7+365/15-365/8 <
$conversion cycle2005=365/5+365/11-365/9.
A. can't get this conclusion.
B.AR turnover is lower,one reason is less AR in 2005, maybe caused by more strict credit policies.
答案选B,问题:AR turn over变小,days of sales outstanding变大不是说明loose credit policy嘛?求解


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