Question: How would one explain a low receivables turnover ratio?

How would one explain a low receivables turnover ratio?

Step by Step Solution

★★★★★

3.17 Rating (169 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

A low receivables turnover implies a high DSO Th... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

141-B-C-F-F-S (317).docx

120 KBs Word File

Students Have Also Explored These Related Corporate Finance Questions!

Q:

How is the receivables turnover ratio measured? What does this ratio indicate? Is a higher or lower receivables turnover preferable?

Q:

Explain the difference between the receivables turnover ratio and the average collection period (ACP).

Q:

How might the receivables turnover and days sales uncollected reveal that management is consistently underestimating the amount of losses from uncollectible accounts? Is this action ethical?

Q:

Section FIN220 Assignment 2 Part 1: Critical Thinking Questions 1) What is net working capital? Why might a low value for this number be considered undesirable? 2) What is the difference between book...

Q:

7) Inventory is excluded when the quick ratio or acid-test ratio is calculated because inventory is the most difficult current asset to convert to cash without loss of value. What types of inventory...

Q:

3. At the beginning of January 2013,Aeropostalehad a balance of $10,000 in its Retained Earnings account. During the month of January 2013, the company engaged in the following transactions? What was...

Q:

Partial financial information for Fleetwood Corporation is provided below. Assume all sales are on credit. Year 2 Year 1 Accounts receivable $150,000 $90,000 Inventory 195,000 130,000 Net sales...

Q:

A vertical analysis is best used to make comparisons between multiple companies. true False In vertical analysis of the income statement, we usually express each income statement item as a percentage...

Q:

Big Hit, Inc., reported a net loss of $30 million in the current year and net income of $60 million in the prior year. Which of the following will be the percentage change in income? 150% 50% (50%)...

Q:

Amount Cash $500,000 Accounts receivable 400,000 Inventory 300,000 Long-term assets 900,000 Total assets $2,100,000 Using vertical analysis, what percentage is applicable to Inventory? 14.3% 30.0%...

Q:

What is the experimental evidence in favor of radioactivity being a nuclear process?

Q:

(a) When cooled, the densities of most objects (1) increase, (2) decrease, (3) stay the same. (b) By what percentage does the density of a bowling ball change (assuming it is a uniform sphere) when...

Q:

You are told that the cross-price elasticity between goods X and Y is +2.0. This means that (A) goods X and Y are normal goods. (B) goods X and Y are inferior goods. (C) goods X and Y are...

Q:

17.60 Can we improve the capability of the meatpackaging process? Refer to Exercise 17.59. The average weight of each section can be increased (or decreased) by increasing (or decreasing) the time...

Q:

You must choose between investing in stock A and stock B. You have already used CAPM to calculate the rate of return you should expect to receive for each stock given their systematic risk and...

Q:

Suppose that you know the risk and the expected return for two stocks. Discuss the process you might utilize to determine which of the two stocks is a better buy. You may assume that the two stocks...

Q:

In February 2014 the risk free rate was 4.75 percent, the market risk premium was 6 percent and the beta for Twitter stock was 1.31. What is the expected return that was consistent with the...

Q:

All projects (A to G) are 7-year projects. NPV = Net present value. IRR = internal rate of return. MIRR = modified internal rate of return. PI = profitability index. Criteria Project_A Project_B...

Q:

A stock just paid a dividend of $5.21 and is expected to maintain a constant dividend growth rate of 4.8 percent indefinitely. If the current stock price is $73, what is the required return on the...

Q:

You've borrowed $23,500 on margin to buy shares in Disney, which is now selling at $47 per share. Your account starts at the initial margin requirement of 50%. The maintenance margin is 35%. Two days...