📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!
  • google app store apple app store
    • ✖

      Question

      A company has Net Sales of ₹500 crore and Receivables

      of ₹50 crore. Its Debtors Turnover Ratio is 10. What does it imply about the firm's collection efficiency?
      A Receivables are too high Correct Answer Incorrect Answer
      B Collection cycle is 36.5 days Correct Answer Incorrect Answer
      C Bad debts are not recorded Correct Answer Incorrect Answer
      D Inventory holding is high Correct Answer Incorrect Answer
      E Profit margins are excellent Correct Answer Incorrect Answer

      Solution

      Debtors Turnover = Net Sales / Receivables = 500 / 50 = 10 Collection Period = 365 / 10 = 36.5 days Indicates efficient collection of outstanding dues within ~1 month.

      Practice Next
      More Previous year papers Questions