A short accounts receivable turnover ratio may mean all of the following except:

Question

Quizplus · Accepted Answer

A short accounts receivable turnover ratio means that the company is collecting cash from sales quickly, which is generally a good thing. However, it does not necessarily indicate that customers are dictating payment terms or that there are fewer uncollectible receivables. In fact, a company with a short turnover ratio may be offering attractive payment terms and still collecting cash quickly, or it may simply have a high volume of receivables that are being regularly turned over.

A Short Accounts Receivable Turnover Ratio May Mean All of the Following