Which of the following statements about receivables turnover analysis is correct?
A. A high turnover ratio may suggest the company is allowing too much time for customers to pay.
B. The days to collect ratio is found by dividing the receivables turnover ratio by 365 days.
C. The receivables turnover ratio indicates how many times, on average, the process of selling to and collecting from customers occurs during the accounting period.
D. Companies of similar size in different industries tend to have similar receivables turnover ratios.
Answer: C
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