Total revenue from operations Rs 27 00 000 Credit revenue from operations Rs 18 00 000 Opening Debto...........

General Accounting Principles Ratio analysis

Total revenue from operations Rs 27,00,000; Credit revenue from operations Rs 18,00,000; Opening Debtors Rs 3,20,000; Closing Debtors Rs 4,00,000; Provision for Doubtful Debts Rs 60,000. Trade Receivables Turnover Ratio will be :

7.5 times

9 times

6 times

5 times

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Explanation:

Total revenue from operations Rs 27,00,000; Credit revenue from operations Rs 18,00,000; Opening Debtors Rs 3,20,000; Closing Debtors Rs 4,00,000; Provision for Doubtful Debts Rs 60,000

average trade receivales before provision = opening debtors + closing debtors / 2

= Rs. 3,20,000 + Rs.4,00,000 / 2

= Rs. 3,60,000

trade receivales trurnover ratio = credit revenue from operations

average trade receivales

= Rs, 18,00,000

Rs. 3,60,000

= 5 times