Tepsi's accounts receivable turnover was 9.9 for this year and 11.0 for last year. Craig's turnover was 9.3 for this year and 9.3 for last year. These results imply that:
A) Craig has the better turnover for both years.
B) Tepsi has the better turnover for both years.
C) Craig's turnover is improving.
D) Craig's credit policies are too loose.
E) Craig's is collecting its receivables more quickly than Tepsi in both years.

Question

Quizplus · Accepted Answer

Tepsi has a higher accounts receivable turnover for both years compared to Craig. This means that Tepsi is collecting its receivables more quickly than Craig. It is not possible to determine if Craig's turnover is improving or if its credit policies are too loose based on the given information.

Tepsi's Accounts Receivable Turnover Was 9