A receivables turnover ratio that is significantly higher than the industry average may indicate
A)a collection problem.
B)that a company's credit-granting policies are too loose.
C)that a company's collection period is higher than the industry.
D)that a company's credit-granting policies are too tight.

Question

Quizplus · Accepted Answer

A significantly higher receivables turnover ratio suggests that a company collects its receivables more quickly than the industry average, which could be due to stricter credit policies that lead to faster payments from customers.

A Receivables Turnover Ratio That Is Significantly Higher Than the Industry