What is the numerator to be used in the trade receivables turnover ratio?
Options:
Net credit sales
Net credit purchases
Net cash sales
Net cash purchases
Correct Answer:
Net credit sales
Explanation:
Trade Receivables Turnover Ratio It expresses the relationship between credit revenue from operations and trade receivable. It is calculated as follows : Trade Receivable Turnover ratio = Net Credit Revenue from Operations/Average Trade Receivable
