Question

Read the following hypothetical extract of ABC Ltd. and answer the question that follows:

The following information is given:

Trade Receivables Turnover Ratio	4 times
Current Liabilities	₹ 5,000
Average Debtors	₹ 1,80,000
Working Capital Turnover Ratio	8 times
Cash Revenue from Operations	25% of Revenue from Operations
Gross Profit Ratio	`33 1/3%`

What is the revenue from operations?

पर्याय

• ₹ 9,60,000

• ₹ 6,40,000

• ₹ 1,80,000

• ₹ 7,20,000

Answer 1

₹ 9,60,000

Explanation:

Trade Receivables Turnover ratio = `"Credit Revenue from Operations"/"Average Trade Receivables"`

4 = `"Credit Revenue from Operations"/(1,80,000)`

Credit Revenue from Operations = ₹ 1,80,000 × 4 = ₹ 7,20,000

Credit Revenue from Operations = 75% of Revenue from Operations

₹ 7,20,000 = 75% of Revenue from Operations

Revenue from Operations = ₹ 9,60,000