Question

Consider the following data Net annual sales Rs. 18,25,000 ; Cost of sales Rs.5,00,000; Average trade debtors Rs.4,50,000 ; Creditors Rs.3,00,000 The average collection period (assuming 365 days a year ) was

1)60 days
2)90 days
3)150 days
4)200 days​

Answer 1

Answer:

trade receivable turnover ratio =

Net sales/ average debtors

= 1825000/450000

=4.05 times

average collection period= 365/ ratio

= 365/4.05

=90 days