G Co and A Co are both in the biotechnology industry. In 2013, G Co reported a trade payables turnover of 7.71 and A Co reported a ratio of 3.06. Which of the following is an incorrect reason for the difference in ratios?
A) A Co has a lower average trade payables in comparison to G co.
B) G Co has a better payment record in terms of timely payment to vendors.
C) A Co is taking longer to pay vendors.
D) A Co has a higher average trade payables in comparison to G co.

Question

Quizplus · Accepted Answer

A lower average trade payables would result in a higher turnover ratio, not a lower one, making option A incorrect.

G Co and a Co Are Both in the Biotechnology