Asked by Lauren Byrd-Moreno on Jun 16, 2024
Verified
Axle Co.'s accounts receivable turnover was 9.9 for this year and 11.0 for last year.Betterman's turnover was 9.3 for this year and 9.3 for last year.These results imply that:
A) Betterman has the better turnover for both years.
B) Axle has the better turnover for both years.
C) Betterman's turnover is improving.
D) Axle's credit policies are too loose.
E) Betterman is collecting its receivables more quickly than Axle in both years.
Accounts Receivable Turnover
Accounts Receivable Turnover is a financial metric that measures how efficiently a company collects cash from its credit sales, calculated by dividing total credit sales by the average accounts receivable during a period.
Credit Policies
Guidelines established by businesses to determine to whom they will extend credit and on what terms.
- Analyze and interpret accounts receivable turnover to assess company performance.
Verified Answer
Learning Objectives
- Analyze and interpret accounts receivable turnover to assess company performance.
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