102 :- Closing Trade Receivables Rs 4,00,000; Cash Sales bring 25% of Credit Sales; Excess of Closing Trade Receivables over Opening Trade Receivables Rs 2,00,000; Revenue from Operations,I.e, Net Sales Rs 15,00,000. Calculate Trade Receivables Turnover Ratio.
Solution :-
Closing Trade Receivables = Rs 4,00,000
Opening Trade Receivables = 4,00,000 – 2,00,000
= Rs 2,00,000
Let Credit Sales be x
Net Revenue from Operations = Cash Sales + Credit Sales
15,00,000 = 25x/100 + x
15,00,000 = 125x/100
x = 150,000,000/125
x = Rs 12,00,000
Credit Sales = Rs 12,00,000
Trade Receivable Turnover Ratio = Credit Revenue from Operations/Average Trade Receivables
= 12,00,000/[(2,00,000 + 4,00,000)/2]
= 12,00,000/3,00,000
= 4 Times