In 2012,C Co's Receivables Turnover Ratio and Days' Sales in Receivables

question 51

Multiple Choice

In 2012,C Co's receivables turnover ratio and days' sales in receivables was 11.43 times and 31.9 days.In 2012,P Co's receivables turnover ratio and days' sales in receivables was 9.71 times and 37.6 days.Which of the following statements is false?

• A)The higher turnover ratio for C Co hurts their liquidity.
• B)P Co's lower turnover ratio has an inverse relationship to its days' sales tied up in receivables.
• C)P Co's management has done a better job of managing their receivables.
• D)C Co appears to be more profitable than P Co.

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