Which of the following ratios is appropriate for the evaluation of accounts receivable?

Choice "a" is correct. Among the ratios listed, the ratio that is appropriate for the evaluation of

accounts receivable is the number of days sales are outstanding. Sales are related to accounts

receivable, so the more days the sales are outstanding, the longer the receivables are outstanding.

Choice "b" is incorrect. Return on total assets is not appropriate for the evaluation of accounts

receivable.

It is appropriate for the evaluation of return and of total assets, but not for the evaluation of account

receivable specifically.

Choice "c" is incorrect. The collection to debt ratio has nothing to do with the evaluation of accounts

receivable.

Choice "d" is incorrect. The current ratio is appropriate for the evaluation of liquidity (one of the

ways to evaluate liquidity) but has nothing to do with the evaluation of accounts receivable, other

than that accounts receivable is in the numerator of the current ratio.