Illustrate the method of determining trade receivables turnover r… - Vidyadip

Question

Illustrate the method of determining trade receivables turnover ratio What does it indicate?

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Answer

Trade Receivables.
$\text{Turnover Ratio } = \frac{\text{Credit Revenue from Operations (Credit Sales)}}{\text{Average Trade Receivables}}= \ ...\text{Times}$
This ratio indicates the speed with which the amount is collected from trade receivables. The higher the ratio, the better it is, since it indicates that amount from trade receivables is being collected more quickly.

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