If a firm reduced its allowance for bad debts from 25 to 15


If a firm reduced its allowance for bad debts from 2.5% to 1.5%, would there be any immediate impacts on operating income or operating cash flows?A firm has been generating a stable ROE despite a steadily falling operating income. Give one reason why this possible.

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Finance Basics: If a firm reduced its allowance for bad debts from 25 to 15
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