Victoria has 32mi of accounts receivables and 5mi of, Ask an Expert

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Victoria has $3.2mi. of accounts receivables and $5mi. of current assets. Its DSO(days sales outstanding in receivables)is 40 (based on a 365-day year), and its current ratio is 1.5. The firm plans to reduce its DSO to the industry average of 30 without causing a decline in sales. The resulting decrease in accounts receivable will free up cash that will be used to reduce current liabilities. If this plan succeeds, what will be the new current ratio?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92653441

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