20. Calculate Trade Receivable Turnover Ratio from the following information
Total Revenue from operation Rs. 5,20,000, Cash Revenue from operation 60% of credit sales. Closing Trade Receivable Rs. 80,000 and opening Trade Receivable 3/4 of closing Trade Receivable.
21. A company,s Inventory Turnover Ratio is 5 times; Liquid Ratio of 1 and Current Ratio of 2. It had current Assests of Rs. 4,00,000. Find out the Revenue from operation if goods are sold at a profit of 25% above cost.
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| Calculation | ||
| Particulars | ||
| Let Credit Sales = X | ||
| Therefore Cash Sales | (60 % of X) | 0.6 X |
| Total Sales = Cash + Credit | ( X + 0.6 X) | 1.6 X |
| Total Sales Given | 520,000 | |
| X or Credit Sales | (5,20,000 / 1.6) | 325,000 |
| Closing trade receivable | 80,000 | |
| Opening trade receivable | (3/4 of Closing = 80,000 x 3/4) | 60,000 |
| Average trade Trade receivable | (80,000 + 60,000) / 2 | 70,000 |
| Trade Receivable turnover ratio | (3,25,000 / 70,000) | 4.64 |
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