The Receivables Turnover Ratio Indicates

question 96

Multiple Choice

The receivables turnover ratio indicates:

• A)How efficient the company is at managing sales and inventory.
• B)The relationship between sales and cost of goods sold.
• C)The number of times during a year that the average accounts receivables were collected.

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Definitions:

Reserve Ratio

The portion of depositors' balances that banks must have on hand as cash.

Bank Leverage

The ratio of a bank's total debt to its equity capital, indicating the extent to which bank funding is used to finance its assets.

Bank Insolvency

A condition where a financial institution's liabilities exceed its assets, rendering it incapable of meeting its obligations.

Required Reserve Ratio

The fraction of deposits that banks are required to keep on hand as reserves, either in their vaults or on deposit at a central bank.