Dear Friends
I am confusing in calculation debtors receivable in days ration?
Average Debtors – 8 Crore Credit Sales – 15 Crore please calculate it?
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Urgent please
Replies (3)
you asked in days ration no......im wrong then the other answer posted is right
| Debtors Turnover Ratio - 15/8 = 1.875 | |||
| In Days - 365/1.875 = 195 Days | |||
Single step is: Average Receivable / (Net credit Sales /365)
8,00,00,000 / (15,00,00,000/365) = 195.
This means that I the company collect its debts every 195 days or 1.875 (Debtors TO Ratio) times a year.
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