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

Question

Quizplus · Accepted Answer

A low receivables turnover ratio indicates that the process of selling and collecting cash from credit sales is being made less frequently,resulting in more time between the credit sale and its collection.This generally means that less cash is available for business operations.

What Does a Low Receivable Turnover Ratio Indicate