The Grass is Greener Corporation's receivables turnover ratio decreases from 14.1 to 11.8.Which of the following statements is true?

Question

Quizplus · Accepted Answer

A decrease in receivables turnover ratio indicates that it is taking longer for the company to collect credit payments from its customers. Option B is incorrect because a decrease in receivables turnover ratio does not necessarily indicate declining credit costs. Option C is incorrect because a more efficient collection method would result in an increase in the receivables turnover ratio. Option D is incorrect because the receivables turnover ratio is not related to buying and selling financial assets.

The Grass Is Greener Corporation's Receivables Turnover Ratio Decreases from 14.1