A High Receivables Turnover Ratio Is a Sign of a Company's

question 118

Multiple Choice

A high receivables turnover ratio is a sign of a company's:

• A)effectiveness in granting and collecting credit.
• B)weakness in granting and collecting credit.
• C)profitability.
• D)ability to sell goods quickly.

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Definitions:

Compensation Expense

An expense reported by businesses related to the cost of compensating employees, including wages, salaries, and bonuses.

Stock Appreciation Rights

A type of incentive given to employees or executives that entitles them to receive benefits equivalent to the appreciation of the company's stock over a specified period.

Compensation Expense

Compensation expense is the total amount of salary, wages, bonuses, and benefits that a company recognizes for its employees' services during a period.

Options Pricing Model

A mathematical model used to determine the theoretical price of options contracts, taking into account factors like the stock price, strike price, volatility, and time to expiration.