A high accounts receivable turnover in comparison with competitors suggests that the firm should tighten its credit policy.

A high accounts receivable turnover implies that the company is collecting its outstanding receivables quickly, which is a good thing. Hence, there is no need to tighten the credit policy. On the contrary, if the accounts receivable turnover is low compared to competitors, then it suggests that the firm needs to re-evaluate its credit policy to improve its cash flow.