All of the following are true of the number of days' sales uncollected ratio except:
A. Reflects the liquidity of receivables.
B. Can be used for comparisons to other companies in the same industry.
C. Is most effective in evaluating the cash sales of a company.
D. Can be used for comparisons between current and prior periods.
E. Measures how much time is likely to pass before the current amount of accounts receivable is received in cash.
Answer: C
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