Final answer:
A company would prefer a lower average days to collect receivables, indicating fewer days to collect a receivable.
Step-by-step explanation:
Other things being equal, a company would prefer that its average days to collect receivables be lower, indicating that it takes the company fewer days to collect a receivable.
In the context of a company's financial performance, a lower average days to collect receivables means that the company is able to collect payments from its customers more quickly. This is beneficial for several reasons. First, it improves the company's cash flow, as it can access the funds from its receivables sooner. Second, it reduces the risk of bad debts or unpaid invoices. Lastly, it allows the company to reinvest the collected funds or pay off its own liabilities more promptly, supporting overall business operations.