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    Calculate Trade Receivables Turnover Ratio.

    Reading Comprehension

    Read the following information carefully and answer the next five questions:


    Calculate Trade Receivables Turnover Ratio.

    1) Question

    Calculate Trade Receivables Turnover Ratio.

    A.

    8.18 times

    B.

    8.23:1

    C.

    8.18%

    D.

    8.81:1

    Correct option is A

    2) Question

    Calculate Average Collection Period.

    A.

    30 days

    B.

    60 days

    C.

    45 days

    D.

    15 days

    Correct option is C

    3) Question

    Calculate Trade Payables Turnover Ratio.

    A.

    29.6 times

    B.

    2.96 times

    C.

    29.6%

    D.

    2.69:1

    Correct option is B

    4) Question

    Calculate Average Payment Period.

    A.

    123 days

    B.

    121 days

    C.

    132 days

    D.

    133 days

    Correct option is A

    5) Question

    Trade Receivables Turnover Ratio and Trade Payables Turnover Ratio are categorised as:

    A.

    Liquidity Ratio

    B.

    Solvency Ratio

    C.

    Activity Ratio

    D.

    Profitability Ratio

    Correct option is C

    Both the Trade Receivables Turnover Ratio and Trade Payables Turnover Ratio are classified as activity ratios because they measure how efficiently a company manages its receivables and payables, reflecting the company's effectiveness in using its assets and liabilities.

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