Read the following information carefully and answer the next 5 questions:

Calculate Trade payables turnover ratio.

2.96 times

The correct answer is option 2- 2.96 times.

Trade payables turnover ratio = Credit Purchase / Average trade payables
                                            = 4,20,000/1,42,000
                                            = 2.96 times

Note 1- As other information is given about cash purchases or credit purchases so purchases are considered total credit purchases.
Note 2- There are no opening and closing trade payables, so whole figure is considered as average trade payables.
In order to calculate average Trade payables as the figures of creditors and bills payables in the beginning of the year are not available. So when only year-end figures are available use the same as it is.
So, average trade payables = Bills payables + Trade creditors
                                            = 52,000 + 90,000
                                            = 1,42,000

* Trade payables turnover ratio indicates the pattern of payment of trade payable. It is calculated in times not percentage.