Which Statement Concerning the Receivables Turnover Ratio Is True

question 35

Multiple Choice

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.

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Definitions:

Fungi

A kingdom of complex organisms distinct from plants and animals, including yeasts, molds, and mushrooms, often playing essential roles in decomposition and nutrient cycling.

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A group of chemicals used as insecticides, affecting the nervous system by inhibiting an enzyme critical for nerve function.

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Chemicals that are absorbed by a plant and provide protection from pests by poisoning them when they feed on the plant.

Malathion

A chemical compound used as an insecticide, particularly effective against mosquitoes but also posing potential risks to human health and the environment.