In 2012,T Co.reported a receivables turnover ratio of 11.1 and their competitor,WWW Co.,reported a ratio of 4.6.Which of the following is true?
A)T Co.needs to decrease their ratio in order to improve collection time
B)WWW Co.has done a better job of collecting their receivables than T Co.
C)WWW Co.needs to focus on improving their credit and collection process
D)All of the statements are true

Question

Quizplus · Accepted Answer

A higher receivables turnover ratio indicates that T Co. is collecting its receivables more efficiently than WWW Co. Therefore, WWW Co. needs to improve its credit and collection process.