99 :- Closing Trade Receivables Rs 1,00,000; Cash Sales being 25% of Credit Sales; Excess of Closing Trade Receivables over Opening Trade Receivables Rs 40,000; Revenue from Operations,I.e, Net Sales Rs 6,00,000. Calculate Trade Receivables Turnover Ratio.
Solution :-
Closing Trade Receivable = Rs 1,00,000
Opening Trade Receivable = Rs 60,000
Net Sales = Cash Sales + Credit Sales
6,00,000 = 25x/100 + x
125x/100 = 6,00,000
x = 6,00,000 x 100/125
Credit Sales (x) = Rs 4,80,000
Trade Receivables Turnover Ratio = Net Credit Sales/Average Trade Receivables
= 4,80,000/[(60,000 + 1,00,000)/2]
= 4,80,000/80,000
= 6 Times