An Increasing Average Receivables Collection Period Indicates

question 11

Multiple Choice

An increasing average receivables collection period indicates

• A) the firm is generating more income.
• B) accounts receivable are going down.
• C) the company is becoming more efficient in its collection policy.
• D) the company is becoming less efficient in its collection policy.

---

Definitions:

Working Capital

The difference between a company's current assets and current liabilities, representing the short-term liquidity.

Long-Term Debt

Financial obligations of a company that are due more than one year in the future.

Current Assets

Assets owned by a company that are expected to be converted into cash, sold, or consumed within one year or within the operating cycle of the business.

Present Value

The current value of a future sum of money or stream of cash flows given a specified rate of return, used in discounting to determine investment worth.