Please respond to the following:
Examine the steps a company can take to evaluate the liquidity of receivables. Can data analytics improve the evaluation process? Why or why not? Provide support for your rationale.
Be sure to respond to your classmate’s post below:
Examine the steps a company can take to evaluate the liquidity of receivables. The steps a company can take to evaluate the liquidity of receivables include checking the balance of receivables, calculating the expected credit loss of customers, and checking to see how many days are pending in each customer’s account for the amount to be received.
Can data analytics improve the evaluation process? Why or why not? Yes, data analytics can improve the evaluation process. Data analytics are a key factor in breaking down the complex data of a company. For example, the receivable turnover ratio can help a company determine the quality and liquidity of the company’s accounts receivables.