Question

Calculate Trade Receivables Turnover Ratio

• A. 8.18 times
• B. 8.23 : 1
• C. 0.0818
• D. 8.81 : 1
• A. 30 days
• B. 60 days
• C. 45 days
• D. 15 days
• A. 29.6 times
• B. 2.96 times
• C. 0.296
• D. 2.69 : 1
• A. 123 days
• B. 121 days
• C. 132 days
• D. 133 days
• A. Liquidity Ratio
• B. Solvency Ratio
• C. Activity Ratio
• D. Profitability Ratio

Answer 1

The Correct Option is B

The Trade Receivables Turnover Ratio = Revenue from Operations / Average Trade Receivables. Using the data, it is calculated as 8.23 : 1.
Hence, the correct answer is Option 2.

Answer 2

The Average Collection Period is calculated using the formula (365 / Trade Receivables Turnover Ratio). Based on the ratio, it is 45 days.
Hence, the correct answer is Option 3.

Answer 3

The Trade Payables Turnover Ratio is calculated as Purchases / Average Trade Payables. Using the data, the ratio is 2.96 times.
Hence, the correct answer is Option 2.

Answer 4

The Average Payment Period is calculated using the formula (365 / Trade Payables Turnover Ratio). Based on the ratio, it is 121 days.
Hence, the correct answer is Option 2.

Answer 5

Both Trade Receivables and Trade Payables Turnover Ratios are categorized as Activity Ratios because they measure the efficiency of a company’s operations.
Hence, the correct answer is Option 3.