If value of credit revenue from operations is Rs.6,00,000 and Average Trade Receivables are Rs. 2,00,000. What will be Trade Receivables Turnover Ratio?

0.33 Times

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12 Times

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3 Times

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None of the above

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Solution

The correct option is C 3 Times
Trade Receivables Turnover Ratio
= Credit Revenue from Operations / Average Trade Receivables
= Rs. 6,00,000 / Rs. 2,00,000
= 3 times

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Similar questions

(a) From the following calculate 'Trade Receivables Turnover Ratio'.

Total Revenue from operation for year Rs 8,40,000.

Cash Revenue from operation-40% of credit revenue from operation.

Closing Trade Receivable over Opening Trade Receivable by Rs 80,000. Opening Trade Receivables in 20% of credit Revenue from operation.

(b) From the following, calculate Interest Coverage Ratio.

Profit after Interest and Tax Rs 4,97,000.

Rate of Income Tax 30%.

12% Debentures Rs 6,00,000.

Q. Closing Trade Receivables ₹ 1,00,000; Cash Sales being 25% of Credit Sales; Excess of Closing Trade Receivables over Opening Trade Receivables ₹ 40,000; Revenue from Operations, i.e., Net Sales ₹ 6,00,000. Calculate Trade Receivables Turnover Ratio.

Calculate the amount of Opening Trade Receivables and Closing Trade Receivables from the following figures :

Trade Receivables Turnover Ratio 4 times

Cost of Revenue from Operations (Cost of Goods Sold) Rs. 6,40,000

Gross Profit Ratio 20%

Closing Trade Receivables were Rs. 20,000 more than at the beginning.

Cash Revenue from Operations being 33 $\frac{1}{3}$ % of Credit Revenue from Operations.

Closing Trade Receivables ₹ 4,00,000; Cash Sales being 25% of Credit Sales; Excess of Closing Trade Receivables over Opening Trade Receivables ₹ 2,00,000; Revenue from Operations, i.e., Revenue from Operations, i.e., Net Sales ₹ 15,00,000. Calculate Trade Receivables Turnover Ratio

[Hint: 1. Net Credit Sales = Total Sales − Cash Sales

2. Opening Trade Receivables = Closing Trade Receivables − Excess of Closing Trade Receivables over Opening Trade Receivables.]

Q. Calculate Trade Receivables Turnover Ratio in each of the following alternative cases:
Case 1: Net Credit Sales ₹4,00,000; Average Trade Receivables ₹1,00,000.
Case 2: Revenue from Operations (Net Sales) ₹30,00,000; Cash Revenue from Operations, i.e., Cash Sales ₹6,00,000; Opening Trade Receivables ₹2,00,000; Closing Trade Receivables ₹6,00,000.
Case 3: Cost of Revenue from Operations or Cost of Goods Sold ₹3,00,000; Gross Profit on Cost 25%; Cash Sales 20% of Total Sales; Opening Trade Receivables ₹50,000; Closing Trade Receivables ₹1,00,000.
Case 4: Cost of Revenue from Operations or Cost of Goods Sold ₹4,50,000; Gross Profit on Sales 20%; Cash Sales 25% of Net Credit Sales, Opening Trade Receivables ₹90,000; Closing Trade Receivables ₹60,000.

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If value of credit revenue from operations is Rs.6,00,000 and Average Trade Receivables are Rs. 2,00,000. What will be Trade Receivables Turnover Ratio?

The correct option is C 3 TimesTrade Receivables Turnover Ratio = Credit Revenue from Operations / Average Trade Receivables = Rs. 6,00,000 / Rs. 2,00,000 = 3 times

The correct option is C 3 Times
Trade Receivables Turnover Ratio
= Credit Revenue from Operations / Average Trade Receivables
= Rs. 6,00,000 / Rs. 2,00,000
= 3 times