Read the passage carefully and answer the next five questions (value in fraction is to be rounded off to the nearest value).

Trade payable turnover ratio is-

2.96 times

The correct answer is option 2- 2.96 times.

Trade payables = Creditors (90,000) + Bills payable (52,000)
                       = 1,42,000

* 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.

Trade Payable Turnover Ratio = Purchases / Average Trade Payables
                                           = 4,20,000/1,42,000
                                           = 2.96 times