Which Statement Concerning the Receivables Turnover Ratio Is True

question 44

Multiple Choice

Which statement concerning the receivables turnover ratio is true?

• A) It is calculated as total sales divided by average receivables.
• B) A change in the ratio from 4.1 times to 3.5 times is a favourable change.
• C) It is a measure of how many times the average receivables balance is converted into cash during a year.
• D) If the receivables turnover ratio is divided into 365 this gives the average number of days it takes to sell receivables.

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