Question

Marion Industries has an average accounts receivable turnover ratio of 12 times per year whereas most of its competitors have a ratio nearer to 8 times. This suggests that Marion's management should consider:Marion Industries has an average accounts receivable turnover ratio of 12 times per year whereas most of its competitors have a ratio nearer to 8 times. This suggests that Marion's management should consider:

Answer 1

C. using more liberal credit terms to increase sales

Step-by-step explanation:

As in the question it is mentioned that the ratio of account receivable turnover has determined that it has 12 times which means it takes 30 days

= 365 ÷ 12

= 30.41

= 30 days

Now the competitor has a ratio of account receivable turnover is 8 times which means it takes 45 days

So Marian management should considered that more liberal credit terms should be used in order to rise the sales

Therefore the option c is correct