When comparing one company to another,what kind of information does the accounts receivable turnover provide?
A)How well each company manages the financing of its assets
B)How effective each company is at collecting cash from its credit customers
C)How profitable each company is based on the sale of its products
D)How much profit is generated by a share of each company

Question

Quizplus · Accepted Answer

The accounts receivable turnover ratio measures how effective a company is at collecting cash from its customers who have purchased goods or services on credit. This provides insight into the company's ability to manage its working capital and generate cash flow. Therefore, comparing the accounts receivable turnover ratio of one company to another can indicate which company is better at collecting receivables and managing its cash flow.

When Comparing One Company to Another,what Kind of Information Does