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If there are credit revenue from operations ₹9,00,000, bills receivable ₹60,000 in a year, then trade receivables turnover will be: a) 3 times b) 9 times c) 6 times d) 12 times?
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If there are credit revenue from operations ₹9,00,000, bills receivabl...
Trade Receivables Turnover Ratio

The trade receivables turnover ratio indicates the number of times trade receivables are converted into cash during a specific period. It measures the efficiency of a company in collecting its outstanding receivables.

Calculation

The formula for calculating trade receivables turnover ratio is:

Trade Receivables Turnover Ratio = Credit Revenue from Operations / Average Trade Receivables

Where,

Average Trade Receivables = (Opening Trade Receivables + Closing Trade Receivables) / 2

Solution

Given, credit revenue from operations = ₹9,00,000
Bills receivable = ₹60,000

We are not given the opening and closing balances of trade receivables, so we cannot calculate the average trade receivables. Therefore, we cannot calculate the trade receivables turnover ratio.

Conclusion

Without the opening and closing balances of trade receivables, we cannot calculate the trade receivables turnover ratio. Therefore, the answer to the question is "cannot be determined."
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