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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.