A Ratio That Is Related to the Receivables Turnover Ratio

question 121

Multiple Choice

A ratio that is related to the receivables turnover ratio is the

• A)inventory turnover ratio.
• B)days sales in inventory ratio.
• C)bad debts ratio.
• D)average collection period.

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Definitions:

Profits

The financial gain realized when the revenue earned from business activities exceeds the expenses, costs, and taxes needed to sustain those activities.

Output

The quantity of goods or services produced by a business, industry, or economy within a specific period.

Shutting Down

A short-run decision by a firm to cease production temporarily due to unfavorable market conditions.

Long Run

A period in economics where all factors of production and costs are variable, allowing for full adjustment to changes.