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Credit Sales ₹36,00,000; Average Receivables ₹6,00,000. Receivables Turnover Ratio is:
A4 times
B5 times
C6 times
D8 times
Answer & Solution
Correct answer: C. 6 times
1. Receivables Turnover = Credit Sales / Average Receivables = 36,00,000 / 6,00,000.
2. Result = 6 times.
3. Average collection period would be 360/6 = 60 days.
_Source: ICAI BoS CA Inter Paper 6A, Ch 3 "Financial Analysis and Planning — Ratio Analysis", §3.3(ii)_
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