If a company factors its receivables, its receivables turnover ratio will be lower than it would have been if the receivables had not be factored.

Name: If a company factors its receivables, its receivables turnover ratio will be lower than it would have been if the receivables had not be factored.
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Factoring receivables typically results in a higher receivables turnover ratio because the receivables are converted to cash more quickly, reducing the average receivables balance.

If a Company Factors Its Receivables, Its Receivables Turnover Ratio