Respuesta :
According to the declaration The longer the firm takes to collect on its own receivables, the further efficient the firm is.
What exactly is receivables turnover?
The receivable Turnover Ratio, also known as Debtor's Turnover Ratio, is an accounting metric used to assess how efficient a company is at extending credit and collecting debts. The receivables turnover ratio is really an activity ratio that measures how well a company utilizes its assets.
Briefing:
Days on sales outstanding is a measure of activity.
DSO = number of days in a period / receivables turnover
DSO assesses the effectiveness of a company's receivables collection policy.
Receivables turnover ratio = Revenue / average receivables
The faster a company collects its receivables, the further efficient it is.
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I understand that the question you are looking for is:
Which one of the following statements is NOT true? Question 6 options: DSO measures in days, the time the firm takes to convert its receivables into cash. One ratio that measures the efficiency of a firm's collection policy is days' sales outstanding. The accounts receivables turnover ratio measures how quickly the firm collects on its credit sales. The more days that it takes the firm to collect on its receivables, the more efficient the firm is.
