A decrease in receivables turnover ratio is indicative of:
A) an increase in sales revenue.
B) slower-selling inventory.
C) an increase in accounts receivable.
D) a decline in cost of goods solD.
Receivable turnover = Net sales ÷ Average net receivables

Question

Quizplus · Accepted Answer

A decrease in receivables turnover ratio indicates that the company is collecting its accounts receivable at a slower rate, which could be due to an increase in accounts receivable. This could be a sign of potential cash flow problems or difficulty in collecting payments from customers.

A Decrease in Receivables Turnover Ratio Is Indicative Of