Final answer:
A company would prefer its accounts receivable turnover ratio to be higher, signifying quicker collection of receivables and suggesting effective credit management and healthy cash flows.
Step-by-step explanation:
Other things being equal, a company would prefer that its accounts receivable turnover ratio be higher, indicating that the company is faster at collecting its receivables. The accounts receivable turnover ratio is an important measure of a firm's efficiency in managing its receivables and indicates how quickly a company converts its credit sales into cash. A higher ratio suggests that the company is more effective in its collection efforts, which is attractive because it implies that the company can reinvest the cash into the business more quickly. Moreover, a high turnover ratio may suggest that the company is granting credit to customers who are more likely to pay promptly, which is a sign of a strong customer base and good credit policies. In contrast, a lower turnover ratio may indicate potential problems in credit management or issues with liquidity, and you would pay less for it.