Question:
If the company reduces its receivables without adversely affecting sales, what effect should this have on the company's cash position (1) in the short run and (2) in the long run?
Which ratios would explain whether a firm's customers pay more or less promptly than those of its competitors? Which ones would suggest that a firm should tighten or loosen its credit policy?
Is there any reason to think that a firm may be holding too much receivables? If so, how would that affect EVA and ROE?