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Business, 02.04.2021 01:40 Picklehead1166

Companies A and B both report net income growth of 12% per year. Company A has a receivables turnover ratio of 5.6, which is lower than last year. Company B has a receivables turnover ratio of 11.3, which is higher than last year. All other things being equal:Company B's days to collect increased. Company A is more effectively managing its receivables.

Company A's days to collect is lower than Company B's in both years.

Company B is more effectively managing its receivables.

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