Final answer:
WWW Co.'s lower receivables turnover ratio suggests it needs to improve its credit and collection process. T Co.'s higher ratio indicates it is more efficient at collecting its receivables than WWW Co., making option a) correct.
Step-by-step explanation:
The receivables turnover ratio is an indicator of how efficiently a company manages its accounts receivable. It reflects how many times a company can turn its receivables into cash during a period. A higher ratio indicates that the company is more efficient at collecting its account receivables. In the context of the question, T Co. reported a receivables turnover ratio of 11.1, which is significantly higher than WWW Co.’s ratio of 4.6. Therefore, option a) WWW Co. needs to focus on improving their credit and collection process is true because it suggests that T Co. is collecting its receivables more frequently within the year than WWW Co. The high ratio does not necessarily mean T Co. needs to decrease their ratio to improve collection time, which eliminates option b). Option c) is incorrect because the question pertains to receivables, not inventory management. Finally, option d) is incorrect because T Co., with the higher ratio, is more efficient in collecting receivables than WWW Co.