What does a high receivable turnover ratio indicate?
A) Customer payments are collected relatively soon after the sale has been made.
B) Sales are growing.
C) Credit sales are much greater than cash sales.
D) Cash collections are sluggish, taking longer to collect.

Question

Quizplus · Accepted Answer

A high receivable turnover ratio indicates that customer payments are collected relatively soon after the sale has been made, meaning that the company is efficient in collecting its accounts receivable. This is a positive sign for a company's cash flow and overall financial health.

What Does a High Receivable Turnover Ratio Indicate