Practicing Success
Read the following information carefully and answer the next 5 questions:
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Calculate Trade Receivables Turnover ratio. |
8.18 times 8.23:1 8.18% 8.81:1 |
8.18 times |
The correct answer is option 1- 8.18 times. Trade receivables turnover ratio = Revenue from operations / Average trade receivables NOTE- There are no opening and closing trade receivables, so whole figure is considered as average trade receivables. * The liquidity position of the firm depends upon the speed with which trade receivables are realised. This ratio indicates the number of times the receivables are turned over and converted into cash in an accounting period so answer will be in times not percentage. |