An increase in the receivables turnover means that:
A) The majority of customers are paying slower.
B) The prices of items purchased are rising.
C) The days' sales in receivables are rising.
D) Profit margins are rising.
E) Customers are paying their bills faster.

Question

Quizplus · Accepted Answer

An increase in the receivables turnover ratio indicates that a company is collecting its receivables more quickly, meaning customers are paying their bills faster. This ratio measures how efficiently a company uses its assets.

An Increase in the Receivables Turnover Means That