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What does too low ‘Trade Receivables Turnover Ratio’ indicate? - Accounts

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प्रश्न

What does too low ‘Trade Receivables Turnover Ratio’ indicate?

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उत्तर

Too low trade receivables. The turnover ratio shows that the company is taking longer to collect payments from its clients. This indicates inefficiencies in credit administration, potential problems with the collection process, or that consumers are not paying on time. A low percentage may cause cash flow issues and indicate the need for stricter credit standards or improved receivables management.

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अध्याय 14: Ratio Analysis - SHORT ANSWER QUESTIONS [पृष्ठ १४.१११]

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डी. के. गोएल Accountancy Volume 1 and 2 [English] Class 12 ISC
अध्याय 14 Ratio Analysis
SHORT ANSWER QUESTIONS | Q 60. | पृष्ठ १४.१११
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