A firm has annual credit sales of Rs. 1,500,000 and average trade receivables of Rs. 250,000. What is its receivables turnover ratio?
Correct answer: C. 6 times
- A. 4 times
- B. 5 times
- C. 6 times
- D. 8 times
Explanation
Receivables turnover equals credit sales divided by average trade receivables. The calculation is Rs. 1,500,000 divided by Rs. 250,000, giving 6 times.
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