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Key performance indicators (KPIs) establish standards for accounts receivables (A/R) and:

a) Cash flow management
b) Inventory turnover
c) Profit margin analysis
d) Debt-to-equity ratio

User Jmac
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1 Answer

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Final answer:

KPIs for accounts receivables (A/R) are directly related to cash flow management as they assess how effectively a company handles its incoming cash and credit transactions. Managing cash flow is vital for maintaining liquidity and meeting short-term obligations.

Step-by-step explanation:

Key performance indicators (KPIs) are critical for measuring the efficiency and success of different business activities. For accounts receivables (A/R), KPIs establish standards to assess how effectively a company manages its incoming cash and credit transactions. Among the options provided, the KPIs related to A/R are most directly associated with cash flow management.

Cash flow management is crucial because it influences a company's ability to pay its obligations on time and reflects the health of its A/R processes. Effective cash flow management ensures that the company maintains enough liquidity to meet its short-term needs. Other terms such as asset-liability time mismatch, balance sheet, and bank capital all relate to the broader financial health of an organization, but the direct answer to this question is 'a) Cash flow management' since it is immediately impacted by the performance of accounts receivables.

User Nbaroz
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