Which of the following is least likely a ratio used to forecast working capital accounts such as accounts receivables and inventory?

A. Days sales outstanding
B. Inventory turnover ratio
C. Sensitivity analysis

Correct Answer: C

Sensitivity analysis is a tool that involves changing only one assumption at a time to determine its effect on the estimate of the intrinsic value.

Days sales outstanding is an efficiency ratio used to measure the average number of days a firm takes to collect revenue from its customers. It is used to forecast accounts receivable. The inventory turnover ratio is an efficiency ratio used to forecast inventory. It measures how much inventory a company keeps on hand.