1 / 4

Debtors Turnover Ratio:

Debtors Turnover Ratio:. Definition: Debtors turnover ratio indicates the velocity of debt collection of a firm. In simple words it indicates the number of times average debtors (receivable) are turned over during a year. Formula of Debtors Turnover Ratio:

graham-pittman
Télécharger la présentation

Debtors Turnover Ratio:

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Debtors Turnover Ratio: Definition: Debtors turnover ratio indicates the velocity of debt collection of a firm. In simple words it indicates the number of times average debtors (receivable) are turned over during a year. Formula of Debtors Turnover Ratio: Debtors Turnover Ratio = Credit Sales Average Receivable

  2. CALCULATION • DEBTORS TURNOVER RATIO = 2,61,76,594 =2,31,72,131 4,63,255 286070 =56.51 times =81 times

  3. Significance of the Ratio: This ratio indicates the number of times the debtors are turned over a year. The higher the value of debtors turnover the more efficient is the management of debtors or more liquid the debtors are and vice-versa. It is the reliable measure of the time of cash flow from credit sales.

  4. Debt Collection Period • DCP = Accounts receivable * 365 Credit sales For 2008 For 2007 = 4,63,255 X 100 = 2,86,070 X 100 2,61,76,594 2,31,72,131 DCP = 7 days DCP = 5 days

More Related