Which ratio is one of the sample ratios included in the application creation process?

• A. Inventory Ratios
• B. Days Sales in Receivables
• C. Debt Ratio
• D. Earnings per Share

Answer: (B)

In FCCS, the sample ratios provided during the application creation process are chosen to illustrate common ways to analyze data using metrics that are easy to derive from typical financial statements. Days Sales in Receivables is included because it’s a straightforward, widely used measure of how efficiently a company collects cash from its customers. It links accounts receivable with revenue, giving insight into cash flow and credit policies, and it can be calculated directly from data you usually have in an FCCS model.

The other options target areas that aren’t part of the standard sample ratio set for this initial process. Inventory Ratios focus on stock management, which may require different data inputs. Debt Ratio is a leverage measure requiring debt and asset/equity data, and Earnings per Share is tied to share count and market metrics. While valuable in broader analyses, they aren’t the representative sample ratio shown in the application creation context.