In 2012,P Co Reported a Trade Payables Turnover Ratio of 2.49

question 38

Multiple Choice

In 2012,P Co reported a trade payables turnover ratio of 2.49 and C Co reported a turnover ratio of 1.74 for that same year.Which of the following statements is true?

• A)C Co pays their vendors in a more timely manner than P Co pays their vendors.
• B)On a comparative basis to cost of goods sold,P Co carries more in average payables than does C Co.
• C)It is unclear if P Co pays their vendors in a more timely manner than C Co.
• D)P Co took approximately 147 days while C Co took about 210 days to pay vendors.

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Definitions:

Shareholder Approval

Shareholder approval refers to the affirmative vote of shareholders, typically required for significant company decisions or changes, such as mergers and acquisitions.

Domestic Corporations

Companies that are incorporated and operate within their home country's jurisdiction.

Subsidiary Corporation

A company that is completely or partly owned and wholly controlled by another company, known as the parent company.

Holding Company

A company created to buy and own the shares of other companies, which it then controls.