QuestionMay 22, 2025

Select the correct answer. Daphne is calculating a company's accounts receivable turnover ratio. What will this ratio help the company determine? A. The ratio indicates the efficiency with which the company recovers money from its debtors. B. The ratio indicates how efficiently the company uses its assets to generate sales revenue. C. The ratio indicates the rate at which the company's inventory is churning. D. The ratio indicates the profit that the company earns in relation to its shareholders' equity.

Select the correct answer. Daphne is calculating a company's accounts receivable turnover ratio. What will this ratio help the company determine? A. The ratio indicates the efficiency with which the company recovers money from its debtors. B. The ratio indicates how efficiently the company uses its assets to generate sales revenue. C. The ratio indicates the rate at which the company's inventory is churning. D. The ratio indicates the profit that the company earns in relation to its shareholders' equity.
Select the correct answer.
Daphne is calculating a company's accounts receivable turnover ratio. What will this ratio help the company determine?
A. The ratio indicates the efficiency with which the company recovers money from its debtors.
B. The ratio indicates how efficiently the company uses its assets to generate sales revenue.
C. The ratio indicates the rate at which the company's inventory is churning.
D. The ratio indicates the profit that the company earns in relation to its shareholders' equity.

Solution
4.6(248 votes)

Answer

A. The ratio indicates the efficiency with which the company recovers money from its debtors. Explanation 1. Identify the purpose of accounts receivable turnover ratio The accounts receivable turnover ratio measures how efficiently a company collects revenue from its credit customers.

Explanation

1. Identify the purpose of accounts receivable turnover ratio<br /> The accounts receivable turnover ratio measures how efficiently a company collects revenue from its credit customers.
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