Average collection period and accounts receivable turnover represent some commonly used _____ ratios.
A) debt
B) profitability
C) activity
D) leverage
E) liquidity

Question

Quizplus · Accepted Answer

Average collection period and accounts receivable turnover are both activity ratios, which measure how efficiently a company manages its assets. Average collection period measures the average number of days it takes for a company to collect its accounts receivable, while accounts receivable turnover measures how many times a company collects its accounts receivable over a given period.

Average Collection Period and Accounts Receivable Turnover Represent Some Commonly