The accounts receivable turnover and inventory turnover are used to analyze
A) long-term solvency.
B) profitability.
C) liquidity.
D) leverage.

Question

Quizplus · Accepted Answer

Accounts receivable turnover and inventory turnover are both liquidity ratios. Accounts receivable turnover ratio measures how quickly a company collects its accounts receivable, while inventory turnover ratio measures how efficiently a company manages its inventory. These ratios are important in determining a company's ability to meet its short-term obligations.

The Accounts Receivable Turnover and Inventory Turnover Are Used to Analyze