Question

Credit Turnover ratio is a __________​

Answer 1

Answer:

Creditors Turnover Ratio. It is a ratio of net credit purchases to average trade creditors. It indicates the speed with which the payments are made to the trade creditors. It establishes relationship between net credit annual purchases and average accounts payable.

Answer 2

Answer:

the Creditors Turnover Ratio. It is a ratio of net credit purchases to average trade creditors. It indicates the speed with which the payments are made to the trade creditors. It establishes relationship between net credit annual purchases and average accounts payable.

Explanation:

Accounts payable turnover ratio (also known as creditors turnover ratio or creditors' velocity) is computed by dividing the net credit purchases by average accounts payable. It measures the number of times, on average, the accounts payable are paid during a period.