Advertisements
Advertisements
Question
From the following information, calculate trade receivables turn over ratio:
| ₹ | |
| Credit Revenue from Operations (Credit Sales) | 14,80,000 |
| Revenue from Operations Returns (Sales Returns) | 20,000 |
| Debtors | 2,50,000 |
| Bills Receivable | 42,000 |
| Provision for Doubtful Debts | 1,500 |
Numerical
Advertisements
Solution
Net Credit Revenue from Operations = Credit Sales − Sales Returns
= ₹ 14,80,000 − ₹ 20,000
= ₹ 14,60,000
Average Trade Receivables = Debtors + Bills Receivable
= ₹ 2,50,000 + ₹ 42,000
= ₹ 2,92,000
Trade Receivables Turnover Ratio = `"Net Credit Revenue from Operations"/"Average Trade Receivables"`
= `(₹ 14,60,000)/(₹ 2,92,000)`
= 5 Times
shaalaa.com
Is there an error in this question or solution?
