Which company has the higher receivables turnover ratio?Company ACompany BAverage Net Accounts Receivable$2,000$5,000Average Inventory$4,000$20,000Net Sales$40,000$100,000Multiple choice question.Company A's is greaterCompany B is greaterBoth are the same

Which of the following statements is true regarding the accounts receivable turnover ratio?Question 29Answera.A higher ratio indicates slower collection of receivables.b.A lower ratio indicates faster collection of receivables.c.A higher ratio indicates faster collection of receivables.d.A lower ratio indicates slower collection of receivables.

Costs of goods sold divided by the company’s average inventory figure would yield which ratio?Multiple Choicecurrent ratiodebt to owner’s equity ratioinventory turnoveracid testreturn on sales ratio

Interpreting Activity RatiosDetermine which of the following statement is true? (Note: More than one option may be correct.)For company A, accounts receivable of $0.5 million represents 45 days of sales revenue outstanding Both the company pay their supplier 300 days after deliveryCompany B’s days inventory outstanding (DIO) is greater than company A’s DIOFor company B, accounts receivable of $2 million represents 45 days of sales outstanding

A company reports sales of Rs. 1,200,000, a gross margin of 25%, and an average inventory of Rs. 100,000. What is the inventory turnover ratio?9 times10 times6 times8 times

The following tables provide information regarding two companies. Metrics Company A (in $ million) Company B (in $ million)Sales revenue 4 25Cost of goods sold 0.9 3.2Operating working capital 0.25 4 Company A (all figures in $ million)Fixed assets2.5Owners equity3Cash2.25Short-term debt0.5Accounts receivable0.5Long-term debt1.5Inventory0.75Accounts payable1 Company B (all figures in $ million)Fixed assets11Owners equity13Cash4Short-term debt2.5Accounts receivable2Long-term debt3.5Inventory3Accounts payable1 Assume 360 operating days in a year.Question 2/2MandatoryInterpreting Activity RatiosDetermine which of the following statement is true? (Note: More than one option may be correct.)For company A, accounts receivable of $0.5 million represents 45 days of sales revenue outstanding Both the company pay their supplier 300 days after deliveryCompany B’s days inventory outstanding (DIO) is greater than company A’s DIOFor company B, accounts receivable of $2 million represents 45 days of sales outstanding