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Byju's Answer
Standard XII
Accountancy
Trade Receivables Turnover Ratio
Number of day...
Question

Number of days or months / Trade receivables turnover ratio is used for calculating ___


A

Average collection period

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B

Debtors velocity

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C

Average payment period

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D

None of these

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Solution

The correct option is A

Average collection period


Number of days or months / Trade receivables turnover ratio gives the average collection period


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Q.

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)

Q. 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.
Q. A limited company made Credit Sales of ₹ 4,00,000 during the financial period. If the collection period is 36 days and year is assumed to be 360 days, calculate:
(i) Trade Receivables Turnover Ratio;
(ii) Average Trade Receivables;
(iii) Trade Receivables at the end when Trade Receivables at the end are more than that in the beginning by ₹ 6,000.
Q. Calculate Gross Profit Ratio from the following data:
Average Inventory ₹3,20,000; Inventory Turnover Ratio 8 Times; Average Trade Receivables ₹4,00,000; Trade Receivables Turnover Ratio 6 Times; Cash Sales 25% of Net Sales.
Q.

Trade Receivables Turnover ratio =


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