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

Average payment period is......

123 days

The correct answer is option 3- 123 days.

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

Average Payment Period = 365/Trade Payables Turnover Ratio
                                    = 365/2.96 times
                                     = 123.31 or 123 days