A high receivables turnover ratio indicates
A) the company's sales are increasing.
B) customers are making payments very quickly.
C) customers are making payments slowly.
D) a large proportion of the company's sales are on credit.

Question

Quizplus · Accepted Answer

A high receivables turnover ratio suggests that customers are paying off their debts quickly, indicating efficient credit and collection processes. It does not directly indicate increasing sales, the speed at which customers are paying slowly, or the proportion of sales made on credit.

A High Receivables Turnover Ratio Indicates