Calculate the trade payables turnover ratio from the following ratio-
| PARTICULARS | AMOUNT (₹) |
| Credit purchases | 620000 |
| Purchases return out of credit purchases | 20000 |
| Opening creditors | 100000 |
| Closing creditors | 140000 |
| Opening B/P | 25000 |
| Closing B/P | 35000 |
Answer & explanation
Correct answer: option 2
Trade Payables Turnover ratio = Net Credit purchases/ Average trade payable
= 600000/150000
= 4 Times
* Net credit purchases = 620000 - 20000
= ₹600000
* Average creditors and B/P = (100000 + 140000 + 25000 + 35000)/ 2
= ₹150000