The answer is false. The company may be giving credit to high-risk borrowers or allowing an excessively flexible repayment schedule if the ratio of receivables turnover increases noticeably.
Feedback: The credit of receivables turnover counts the times that repayment have changed hands throughout the time period. Simply put, an increase in accounts receivable turnover indicates that a business is handling credit more efficiently. A drop in accounts receivable turnover indicates that a business is dealing with more past-due customers. A high ratio of accounts receivable turnover might reveal the company's collection methods, including how efficiently or aggressively it extends credit to clients.
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