Question

Total revenue from operations Rs. 9,00,000, Cash revenue from operations Rs. 3,00,000, Debtors Rs. 1,00,000, B/R Rs. 20,000. Trade Receivables Turnover Ratio will be :​

Answer 1

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Answer 2

Given: Total revenue from operations Rs. 9,00,000, Cash revenue from operations Rs. 3,00,000, Debtors Rs. 1,00,000, B/R Rs. 20,000

To find: Trade Receivables Turnover Ratio

Solution:

The formula for trade receivables turnover ratio is equal to

Credit revenue from operations / average trade receivable

Credit revenue from operations= Total revenue for operations- cash revenue from operations.= 9,00,000-3,00,000= 6,00,000

Average trade receivables= 1,00,000+20,000/2 = 1,20,000/2= 60,000

trade receivables turnover ratio = 6,00,000/60,000= 10:1

trade receivables turnover ratio = 10:1