If a firms days sales outstanding DSO is much longer than th

If a firm\'s days sales outstanding (DSO) is much longer than the industry average, that means the firm is more efficient in its accounts receivable management tan the industry average. True False

Solution

False.

Explanation:

Days sales outstanding means the average number of days the company take to collect the accounts receivable. The larger number of days it takes to collect the Accounts receivables means the less efficient the company is in its Accounts receivable management.

Therefore, in case industry average of days sales outstanding is less than company, it means the company is not efficient in the activity of collecting its Accounts receivable and in Accounts receivable management.