If the Accounts Receivable Turnover Ratio Increases, the Number of Days

question 38

True/False

If the accounts receivable turnover ratio increases, the number of days it takes to collect the receivables also increases.

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Definitions:

Operating Cash Flow

Represents the amount of cash generated by a company's normal business operations.

Interest Expense

The cost incurred by an entity for borrowed funds.

Tax Rate

The proportion of income or profits taken as tax by the government from an individual or company.

Straight-Line Depreciation

A blueprint for allocating the expense of a solid asset across its useful life in even yearly installments.