A ratio that is related to the receivables turnover ratio is the
A)inventory turnover ratio.
B)days sales in inventory ratio.
C)bad debts ratio.
D)average collection period.

Question

Quizplus · Accepted Answer

The average collection period is closely related to the receivables turnover ratio, as it shows the average number of days it takes for a business to collect payment from its customers. A high receivables turnover ratio and a low average collection period indicate efficient management of receivables. Therefore, the correct answer is D) average collection period.

A Ratio That Is Related to the Receivables Turnover Ratio