Question

Identify the statement below that describes what the Days' sales uncollected ratio assesses. Multiple choice question. It assesses the company's ability to pay its debts. It measures how quickly a company can convert its accounts receivables into cash. It is a useful in evaluating the liquidity of inventory. It measures how profitable a company is when it sells it products.

Answer 1

The Day's sales uncollected ratio evaluates how quickly a company can convert its accounts receivables into cash.

What does the Days Sales Uncollected ratio exactly mean and how it is calculated?

Days Sales Uncollected is the ratio, which is used by the company to measure what number of days the customer will take to pay the credit card balance.

The Days Sales Uncollected  ratio may be calculated through dividing the accounts receivable by net sales and multiplies it by 365.

This ratio is used to count the number of days, the corporation will  acquire to receive the cash for its sale.

Learn more about the Days Sales Uncollected Ratio here:-

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