Which ratio would indicate how quickly a company can collect receivables?

The days receivable ratio is a key performance metric that specifically measures the average number of days it takes a company to collect payment after a sale has been made. This ratio effectively highlights the efficiency of a company's credit and collection policies. A lower value indicates that a company is able to convert its receivables into cash quickly, which is generally a sign of a healthy cash flow and good customer relations.

Calculating this ratio provides insights into the liquidity of a company, as it reflects how quickly it can access cash from sales. It is particularly important in managing working capital, as delays in collections can negatively impact a company's cash position.

The other ratios, while important in their respective areas—such as measuring general liquidity or debt levels—do not specifically address the speed of collecting receivables. The current ratio assesses overall current liabilities against current assets, the cash ratio focuses on the relationship of cash and cash equivalents to current liabilities, and the debt ratio measures a company's total debt in relation to its total assets. None of these metrics provide direct insight into the efficiency of the collection of accounts receivable, making the days receivable ratio the most appropriate choice.