From the following figures obtained from Kalpana Ltd, calculate the tr

1.	From the following figures obtained from Kalpana Ltd, calculate the trade payables turnover ratio and credit payment period (in days).
Answer» Trade payable turnover ratio = (Credit purchases)/(Average trade payable) Average trade payable = ((Opening Closing) (Creaditors + Bills payble))/2 = (30,000 + 50,000 + 45,000 + 35,000)2 = 95,000 Trade payable turnover ratio = 9,50,000/95,000 = 10 times Credit payment period = (No.of days in a year)/(Trade payble turnovver ratio) = 365/10 = 36.5 days

From the following figures obtained from Kalpana Ltd, calculate the trade payables turnover ratio and credit payment period (in days).

Answer»

Trade payable turnover ratio = (Credit purchases)/(Average trade payable)

Average trade payable = ((Opening Closing) (Creaditors + Bills payble))/2

= (30,000 + 50,000 + 45,000 + 35,000)2

= 95,000

Trade payable turnover ratio = 9,50,000/95,000

= 10 times

Credit payment period = (No.of days in a year)/(Trade payble turnovver ratio)

= 365/10

= 36.5 days