Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Debtors turnover ratio( or receivables turnover ratio)
Meaning: this ratio establishes a relation ship between net credit sales and averages trade debtors.
Objective: the objective of computing this ratio is to verify the efficiency with which the trade debtors are managed.
Components: There are two components of this ratio which are as under:
Net credit sales
Average trade debtors
Computation: this ratio is computed by dividing the net credit sales by average trade debtors. This ratio is usually expressed as x number of times. In the form of a formula this ratio may be expressed as under:
Net credit sales = gross credit sales -sales returns
Interpretation: it shows the number of times the debtors are turned over during a year. Generally the higher the value of debtors' turnover the more efficient is the management of debtors or more liquid is the debtors. Similarly low debtor's turnover implies inefficient management of debtors/sales and less liquid debtors a very high ratio may imply a firm inability due to lack of resources to sell on credit there by losing sales and profits. There is no rule of thumb which may be used as a norm to interpret the ratio as it may be different form firm to firm depending upon the nature of business. This ratio should be compared with ratio of other firm doing similar business and a trend may also be found to make a better interpretation of the ratio.
The other source of spontaneous short-term financing is the accrued expenses which arise by the general conduct of business. An accrued expense is an expense which has been incurre
Controlling Things hardly go exactly as planned, and management should make a concerted effort to the monitor and adjust for their deviations. The managerial accountant is the
The advantages and disadvantages of standard costing The benefits for controlling having a standard costing system in operation can be summed up as follows; Cautiously pl
Material storage Sophisticated mathematical models to control economic buying, and systems control the flow of material may all be for naught if the obvious-efficient storekeep
Question: (a) The demand for the output of a certain company is very elastic and modern plant recently installed is capable of greatly increased production. Output at present
Calculate the charges for single and double rooms assuming that the authority wishes to make a RM10, 000 profits an accommodation
the brown boot company was formed
Find the value of the following: a. If the total assets are Rs. 87,000 and the liabilities are Rs. 47,000, find out the amount of capital. b. If the capital of propriet
Simple Queues A simple queue has the following characteristics; 1) There is a simple service channel 2) There are ‘discrete’ customers e.g. customers in a bank, or aircra
Zero-Base Budgeting Zero-Base Budgeting (ZBB) was first developed and introduced for business by Peter A. Pyhrr. From this starting ZBB has been explored and adopted by many o
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd