Analyzing the accounts receivable turnover is important in assessing the short-term liquidity of an organization.

Question

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Accounts receivable turnover measures how quickly a company collects cash from its sales and indicates how efficiently the company is managing its receivables. A higher turnover rate indicates that a company is collecting payments more quickly and has better liquidity in the short-term. Therefore, analyzing the accounts receivable turnover is important in assessing the short-term liquidity of an organization.

Analyzing the Accounts Receivable Turnover Is Important in Assessing the Short-Term