Since receivables and payables both result from sales transactions, a firm with a high receivables-to-sales ratio will also have a high payables-to-sales ratio.

Question

Quizplus · Accepted Answer

Receivables result from sales made on credit, while payables result from purchases made on credit. Therefore, the two ratios are not directly correlated and can vary independently.

Since Receivables and Payables Both Result from Sales Transactions, a Firm