The following information is given for Kabir Ltd., based on 360 days working in a year: Total revenue from operations ₹ 40,00,000/- Trade receivables as on April 2024 ₹ 4,15,000/- Trade receivables as on March 2025 ₹ 4,7
CS Executive · Corporate Accounting and Financial Management · PYQS · December 2025
The following information is given for Kabir Ltd., based on 360 days working in a year: Total revenue from operations ₹ 40,00,000/- Trade receivables as on April 2024 ₹ 4,15,000/- Trade receivables as on March 2025 ₹ 4,75,000/- Cash revenue from operations : 20% of revenues from operations Calculate: (i) Trade receivables turnover ratio (ii) Average credit period.
Answer & Explanation:
Trade receivable turnover ratio: Revenue from operations ₹ 40,00,000 Less: Cash revenue (20%) ₹ 8,00,000 Credit revenue ₹ 32,00,000 Average Receivables Trade Receivables April ₹ 4,15,000 Trade receivables March ₹ 4,75,000 Average receivables ₹ 4,45,000 Debtors Turnover Ratio = Credit Revenue / Average Receivables = ₹ 32,00,000 / ₹ 4,45,000 = 7.19 times Average Credit Period = 360 / (Debtors turnover ratio) = 360 / 7.19 = 50 days
Topics: Financial Management
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