Question

What information can best be elicited from a receivable ratio? A. company performance with current debt collection B. credit extension effect on cash sales C. likelihood of future customer bankruptcy filings D. an increase in future credit sales to current customers

Name: Problem 13, Chapter 9: Principles of Accounting Volume 1: Financial Accounting
Uploaded: 2020-05-20T07:35:34-08:00
Duration: 2 min 25 s
Channel: Puneet Prajapati
Description: What information can best be elicited from a receivable ratio? A. company performance with current debt collection B. credit extension effect on cash sales C. likelihood of future customer bankruptcy filings D. an increase in future credit sales to current customers

   What information can best be elicited from a receivable ratio?
A. company performance with current debt collection
B. credit extension effect on cash sales
C. likelihood of future customer bankruptcy filings
D. an increase in future credit sales to current customers

Principles of Accounting Volume 1: Financial Accounting

Mitchell Franklin,… 1st Edition

Chapter 9, Problem 13

Instant Answer

Solved by Expert Puneet Prajapati

05/20/2020

Step 1

It is calculated by dividing the total accounts receivable by the total net sales, then multiplying by the number of days in the period. Show more…

Show all steps

Thanks for your feedback!

What information can best be elicited from a receivable ratio? A. company performance with current debt collection B. credit extension effect on cash sales C. likelihood of future customer bankruptcy filings D. an increase in future credit sales to current customers

Play audio

Feedback

Puneet Prajapati and 62 other educators are ready to help you.

Ask a new question

Labs

Want to see this concept in action?

NEW

Explore this concept interactively to see how it behaves as you change inputs.

View Labs

Key Concepts

Receivables Ratio

The receivables ratio is a financial metric that measures how efficiently a company collects its accounts receivable. It indicates the speed at which credit sales are converted into cash, reflecting the company's effectiveness in managing credit and collections policies.

Accounts Receivable Turnover

This concept evaluates the rate at which a business collects its outstanding credit sales during a given period. It is a key indicator of the company’s liquidity and overall credit management performance, highlighting how well the company converts its receivables into cash.

Collection Efficiency

Collection efficiency refers to the company’s ability to efficiently collect payments from its customers. It is an important aspect of working capital management that impacts a firm’s cash flow, operational efficiency, and financial health.

Please give Ace some feedback