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The higher the accounts receivable turnover rate, the better off the company is. Do you agree?...

The higher the accounts receivable turnover rate, the better off the company is. Do you agree? Why?

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Answer #1
Yes , We agree that a higher accounts receivables turnover rate, the better off the company is.
Accounts receivables turnover rate indicated the number of times the collection of average accounts receivables of the company.
If it is higher means Company is having an efficient collection system and chances of bad debts may reduce if payments were received on time, whereas low Accounts receivables turnover rate indicates delay in collection of accounts receivables, more chances of bad debts occurrence or company is having inefficient collection system.
It is calculated by dividing the Net credit sale sales during the period by the Average accounts receivables.
Therefore, it is concluded that a higher accounts receivables turnover rate, the better off the company is.
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