The accounts receivable turnover is an indicator of the ability of a company to collect cash from its credit customers.

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The accounts receivable turnover ratio measures how many times a company collects its average accounts receivable balance during a given period. This ratio is used to evaluate a company’s ability to collect its receivables from customers in a timely manner, which affects its cash flow and overall financial health. Therefore, the statement is true.

The Accounts Receivable Turnover Is an Indicator of the Ability