Which statement concerning the receivables turnover ratio is true?
A) It is calculated as total sales divided by average receivables.
B) A change in the ratio from 3.1 times to 2.8 times is a favourable change.
C) If the receivables turnover ratio is divided into 365 this gives the average number of days it takes to sell receivables.
D) It is a measure of how many times the average receivables balance is converted into cash in a year.
Correct Answer:
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