Question : Which ratio would be get by dividing net credit sales by the average debtors?
Option 1: Current ratio
Option 2: Return on the sales ratio
Option 3: Debtors turnover ratio
Option 4: Average receivables
Correct Answer: Debtors turnover ratio
Solution : The debtors turnover ratio, also known as the trade receivables turnover ratio, is a financial analysis technique that determines how frequently debtors are converted into cash on average over the course of a year. Debtors' turnover ratio is calculated by dividing net credit sales by average debtors. Hence option 3 is the correct answer.
Question : The inventory turnover ratio can be used to determine?
Option 1: Sales effectiveness
Option 2: Average Age of Inventory
Option 3: Sales Turnover
Option 4: Average Collection Period by dividing it into 365.
Question : ------------------- ratio indicates the relationship between credit revenue from Operations and average trade receivables during the year.
Option 1: Inventory turnover ratio
Option 2: Capital turnover ratio
Option 3: Trade receivable turnover ratio
Option 4: Trade payable turnover ratio
Question : -------------------ratio indicates the relationship between credit purchases and average trade payables during the year.
Option 1: Trade receivable turnover ratio
Option 2: Trade payable turnover ratio
Option 3: Inventory turnover ratio
Option 4: Current ratio
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