A high accounts receivable turnover ratio indicates:
A) the company's sales are increasing.
B) a large proportion of the company's sales are on credit.
C) customers are making payments very quickly.
D) the company is taking longer to sell inventory.

Question

Quizplus · Accepted Answer

A high accounts receivable turnover ratio indicates that customers are making payments very quickly, which means that the company is collecting cash more efficiently. This is generally a positive sign for the financial health of the company.

A High Accounts Receivable Turnover Ratio Indicates