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Bill Raymond is the CEO of the Drummond Group, a consulting group in the Carolinas. Sales have increased at least five percent every year for the past seven years. Unfortunately, the company has hit a slump this year, and revenue is far less than anticipated. However, in order to receive his performance bonus, Bill must show a sales increase of at least seven percent. When the financials are released, sales have increased by exactly seven percent. Which of the following ratio analyses would be most helpful in revealing that Bill included bogus sales in the company's financials? a) Inventory turnover b) Receivable turnover c) Debt-to-equity ratio d) Quick ratio

User ArrH
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Answer:

B. Receivable turnover

Step-by-step explanation:

Bill Raymond is the CEO of the Drummond Group, a consulting group in the Carolinas. Sales have increased at least five percent every year for the past seven years.

Unfortunately, the company has hit a slump this year, and revenue is far less than anticipated. However, in order to receive his performance bonus, Bill must show a sales increase of at least seven percent. When the financials are released, sales have increased by exactly seven percent. The ratio analyses that would be most helpful in revealing that Bill included bogus sales in the company's financials is called RECEIVABLE TURNOVER

User Clarius
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