If a Company Factors Its Receivables, Its Receivables Turnover Ratio

question 109

True/False

If a company factors its receivables, its receivables turnover ratio will be lower than it would have been if the receivables had not be factored.

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Definitions:

Total Costs

The aggregate amount of money spent on producing goods or services, covering both stable and changeable costs.

Economic Profit

The discrepancy between a company's overall income and its combined explicit and implicit expenses.

TR

A common abbreviation for Total Revenue, the total income generated from sales of goods or services.

TC

Typically stands for Total Cost, which in economics is the sum of all costs incurred in the production of goods or services.