A Lower Receivables Turnover Ratio Generally Indicates More Favorable Management

question 104

True/False

A lower receivables turnover ratio generally indicates more favorable management of accounts receivable by company managers.

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Definitions:

Expected Future Cash Flows

The projected amount of money a company expects to receive and pay out over future periods.

Risk

The exposure to potential financial loss or gain, often measured by the variability of returns.

Limited Liability Protection

A legal structure that shields a company's owners from being personally responsible for the company's debts or liabilities.

Corporate Form

A legal business structure recognized in many jurisdictions allowing the company to operate as a separate legal entity apart from its owners, providing limited liability and ease of ownership transfer.