A scenario under which a company's credit sales are increasing and its accounts receivable turnover is decreasing might suggest:

Question

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Analysts watch for changes in the receivables turnover ratio because a sudden decline may mean that a company is recording sales of merchandise that customers are likely to return later.It also may mean that the company is selling to less financially secure customers or is allowing customers more time to pay their accounts to entice them to buy as much as possible-a practice known as channel stuffing.

A Scenario Under Which a Company's Credit Sales Are Increasing