Question

Which of the following statements about the interpretation of the receivables turnover ratio is not correct?

A) Analysts often interpret a sudden increase in the receivables turnover ratio as a signal of a developing problem.

B) The smaller the receivables turnover ratio the larger the days to collect will be.

C) A change in the receivables turnover ratio may indicate a change in the companys credit granting policies.

D) A change in the receivables turnover ratio may indicate a change in economic conditions.

Answer

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