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Question

Refer the following summarized Balance Sheet & P&L of AB Ltd. as on 31 ‐ 3 ‐ 2022.   Summarized Profit and Loss Account is as under for the year ending on 31 ‐ 3 ‐ '04:                                                                                      Rs. Sales (25% Cash sales)                                              80,00,000 Less: Cost of goods sold                                            56,00,000        Gross Profit                                                                24,00,000        Net profit (Before interest and tax 50%)                     9,00,000 Calculate the following ratios:

Calculate Debtors Ratio (365 days of the year.)

A 45 days Correct Answer Incorrect Answer
B 30 days Correct Answer Incorrect Answer
C 46 days Correct Answer Incorrect Answer
D 32 days Correct Answer Incorrect Answer
E 24 days Correct Answer Incorrect Answer

Solution

Debtors Ratio (Avg. debt collection period) = Debtors + Bills receivable / Credit sales X 365 days = 4,60,000 + 60,000 / 60,00,000 X 365 days             = 0.461 X 365 days = 31.63 days i.e., 32 days

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