Question

dividing netsales by average debtors would yield a) debtors turnover ratio b) collection period ratio c) return on sales ratio 4) inventory turnover ratio​

Answer 1

Answer:

c)................

................. ............

Answer 2

Answer:

The correct answer is found to be option (a) Debtor's turnover ratio.

Explanation:

• Debtor turnover, also known as debt turnover or receivable turnover, indicates how quickly loan sales are converted to cash. This ratio measures a company's efficiency  in managing and collecting loans to its customers.
• One important thing to keep in mind is that  companies typically use total sales rather than net sales, resulting in a high percentage of sales. Therefore, only the net loan turnover rate (net sales) should be taken into account when calculating this ratio.

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