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In early 2017, an analyst who follows the stock of a well-known retailer was looking at a series of two-year
calculations for the firms days sales in accounts receivable:
2012 2014 2016
DSAR 65 days 62 days 5 days
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The analyst cannot understand what could have caused the sharp decline in DSAR over the 2014-2016 period.
Did most customers start paying cash for their purchases, he wonders?
Describe the most likely reason for the sharp decline in the retailers DSAR.
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