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Question

Calculate Trade Receivables Turnover Ratio from the following information:

31st March,2018 (₹) 31st March,2019 (₹)

Sundry Debtors 28,000 25,000

Bills Receivable 7,000 15,000

Provision for Doubtful Debts 2,800 2,500

Total Sales ₹ 1,00,000; Sales Return ₹ 1,500; Cash Sales ₹ 23,500.

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Solution

Net Credit Sales = Total Sales − Sales Return − Cash Sales

= 1,00,000 − 1,500 − 23,500 = 75,000

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Q. Calculate Trade Payables Turnover Ratio and Average Debt payment Period from the following information:

	1st April, 2018 ₹	31st March, 2019 ₹
Sundry Creditors	1,50,000	4,50,000
Bills Payable	50,000	1,50,000

Total Purchases ₹ 21,00,000; Purchases Return ₹ 1,00,000; Cash Purchases ₹ 4,00,000.

The following Balance Sheet and other information, calculate following ratios:

(i) Debt-Equity Ratio (ii) Working Capital Turnover Ratio (iii) Trade Receivables Turnover Ratio

Balance Sheet as at March 31, 2017
Particulars	Note No.	Rs.
I. Equity and Liabilities:
1. Shareholders’ funds
a) Share capital		10,00,000
b) Reserves and surplus		9,00,000
2. Non-current Liabilities
a) Long-term borrowings		12,00,000
3. Current Liabilities
a) Trade payables		5,00,000
Total		36,00,000
II. Assets
1. Non-current Assets
a) Fixed assets
Tangible assets		18,00,000
2. Current Assets
a) Inventories		4,00,000
b) Trade Receivables		9,00,000
c) Cash and cash equivalents		5,00,000
Total		36,00,000

Additional Information: Revenue from Operations Rs. 18,00,000 Calculate:

i) Debt-Equity Ratio

ii) Working Capital Turnover Ratio

iii) Trade Receivables Turnover Ratio

(Debt-Equity Ratio 0.63:1; Working Capital Turnover Ratio 1.39 times; Trade Receivables Turnover Ratio 2 times)

From the following Balance Sheet and other information, calculate following ratios:

(i) Debt-Equity Ratio (ii) Working Capital Turnover Ratio (iii) Trade Receivables Turnover Ratio

Balance Sheet as at March 31, 2017
Particulars	Note No.	Rs.
I. Equity and Liabilities:
1. Shareholders’ funds
a) Share capital		10,00,000
b) Reserves and surplus		9,00,000
2. Non-current Liabilities
Long-term borrowings		12,00,000
3. Current Liabilities
Trade payables		5,00,000
Total		36,00,000
II. Assets
1. Non-current Assets
a) Fixed assets
Tangible assets		18,00,000
2. Current Assets
a) Inventories		4,00,000
b) Trade Receivables		9,00,000
c) Cash and cash equivalents		5,00,000
Total		36,00,000

Additional Information: Revenue from Operations Rs. 18,00,000

Q. Following information is given about a company:

	₹			₹
Revenue From Operations, i.e., Net Sales Gross Profit	1,50,000		Opening Inventory	29,000
Cost of Revenue From Operations	30,000		Closing Inventory	31,000
(Cost of Goods Sold)	1,20,000		Debtors	16,000

From the above information, calculate following ratios:

(i) Gross Profit Ratio,

(ii) Inventory Turnover Ratio, and

(iii) Trade Receivables Turnover Ratio.

Q. From the information given below, calculate Trade Receivables Turnover Ratio:
Credit Revenue from Operations, i.e., Credit Sales ₹8,00,000; Opening Trade Receivables ₹1,20,000; and Closing Trade Receivables ₹2,00,000.
State giving reason, which of the following would increase, decrease or not change Trade Receivables Turnover Ratio:
(i) Collection from Trade Receivables ₹40,000.
(ii) Credit Revenue from Operations, i.e., Credit Sales ₹80,000.
(iii) Sales Return ₹20,000.
(iv) Credit Purchase ₹1,60,000.

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