Company A has a receivables turnover ratio of six times, while Company B, which operates in the same market sector, has a receivables turnover ratio of five times.
This suggests that
A.
Company A has a lower level of receivables than Company B and is, therefore, more efficient than Company B.
B.
Company A has a higher level of receivables than Company B and is, therefore, less efficient than Company B.
C.
Company A has a lower level of receivables than Company B and is, therefore, less efficient than Company B.
D.
Company A has a higher level of receivables than Company B and is, therefore, more efficient than Company B.
Chosen Answer:
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