In 2013, P Co reported a trade payables turnover ratio of 2.49 and C Co reported a turnover ratio of 1.74 for that same year. Which of the following statements is true?
A) On a comparative basis to cost of goods sold, P Co carries more in average payables than does C Co.
B) C Co pays their vendors in a more timely manner than P Co pays their vendors.
C) It is unclear if P Co pays their vendors in a more timely manner than C Co.
D) P Co took approximately 147 days while C Co took about 210 days to pay vendors.

Question

Quizplus · Accepted Answer

The Answer of In 2013, P Co reported a trade payables turnover ratio of 2.49 and C Co reported a turnover ratio of 1.74 for that same year. Which of the following statements is true?
A) On a comparative basis to cost of goods sold, P Co carries more in average payables than does C Co.
B) C Co pays their vendors in a more timely manner than P Co pays their vendors.
C) It is unclear if P Co pays their vendors in a more timely manner than C Co.
D) P Co took approximately 147 days while C Co took about 210 days to pay vendors.

In 2013, P Co Reported a Trade Payables Turnover Ratio