Calculate Trade Receivable Turnover Ratio from the given data.
Credit Sales during the year = ₹18,00,000
Sales return = ₹3,00,000
Bills Receivables on 1/4/2021 = ₹2,00,000
Bills Receivables on 31/3/2022 = ₹2,50,000
Sundry Debtors on 1/4/2021 = ₹4,00,000
Sundry Debtors on 31/3/2022 = ₹1,50,000
Answer & explanation
Correct answer: option 4
The correct answer is option 4- 3 times
Average Trade Receivables = (Opening debtors + opening B/R + Closing debtors + closing B/R) / 2
= (2,00,000 + 2,50,000 + 4,00,000 + 1,50,000) / 2
= 5,00,000
Trade Receivable Turnover Ratio = Net Credit Sales / Average Trade Receivables
= (18,00,000 - 3,00,000) / 5,00,000
= 15,00,000/ 5,00,000
= 3 Times