New NABARD Workshop - Last 4 year trend. March 5 at 5 PM. Register here

    Question

    Read the following information to answer the below

    questions:  Net Sales = 40,00,000 (20 % GP Element) out of which 40% is on credit. Opening Inventories were 60 % of closing inventories. Opening Receivables are 120,000. Calculate the receivables turnover ratio of the company?
    A 6.92 times Correct Answer Incorrect Answer
    B 10.43 times Correct Answer Incorrect Answer
    C 17.39 times Correct Answer Incorrect Answer
    D 4.71 times Correct Answer Incorrect Answer

    Solution

    Credit sales/Average accounts receivables 16,00,000 / 2,30,000 =6.96 times Credit sales = 40,00,000(total sales) * 40% =16,00,000 Average accounts receivables = 1,20,000 (opening debtors) + 3,40,000 (Closing debtors) / 2 = 230,000

    Practice Next