Increase in inventory turnover is not a problem since it means high sales, while decrease in AR turnover means poor credit policies or poor collections..
Answer - A ( the number of times debtors is converted into cash has decreased in the period) - so this would mean a decrease in AR or increase in Average AR
Answer - B (a number of times inventory is converted to cash/sold in the period) would mean an increase in COS (increase in sales) or decrease in average inventory
Assuming credit sales remain consistent, an increase in average AR (resulting to decrease in AR turnover) can possibly indicate poor customer credit mananagement. For B, assuming COGS is consistent, decrease in average Inventory (increasing Inventory Turnover) can possibly indicate that inventories are consistently moving thus more sales.
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