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.

    Receivables Velocity/average collection period of the company?

    A 51 days Correct Answer Incorrect Answer
    B 64 days Correct Answer Incorrect Answer
    C 53 days Correct Answer Incorrect Answer
    D 46 days Correct Answer Incorrect Answer

    Solution

    365 days/ Receivables turnover ratio 365 days/ 6.92 times = 53 days

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