The accounts receivable turnover and inventory turnover ratios are used to analyze
A) Long-term solvency
B) Profitability
C) Liquidity
D) Leverage

Question

Quizplus · Accepted Answer

The accounts receivable turnover and inventory turnover ratios are used to analyze liquidity. Accounts receivable turnover ratio measures how quickly a company is able to collect payments from its customers, while inventory turnover ratio measures how quickly a company is able to sell its inventory. These ratios are important indicators of a company's ability to manage its short-term obligations and maintain liquidity.

The Accounts Receivable Turnover and Inventory Turnover Ratios Are Used