If XYZ's receivables turnover is 4x, what does that mean?
A) XYZ's total sales are rotated four times a year.
B) XYZ has a really good receivables turnover rate.
C) XYZ is able to collect its receivables every 90 days, or 4 times a year.
D) XYZ generates four times as much sales through receivables than sales through cash.

Question

Quizplus · Accepted Answer

Receivables turnover of 4x means the company collects its receivables 4 times a year, which translates to every 90 days (360/4).

If XYZ's Receivables Turnover Is 4x, What Does That Mean