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.
State overhead expenses It is to be noted that the term overheard has a wider meaning than the term indirect expanses. Overheads include the cost of the indirect material and
Each company must establish its own credit policy based on the ground condition and the environment wherein it is operating. The major goal of the credit policy is to stimulate sal
Using one of the companies from DQ 1, describe how inventory planning and accuracy can be defined using the Pareto principle. The company is Target, Inc.
Explain the Scope of cost accounting Scope of cost accounting: the scope of cost accounting is very wide and includes the following: 1 cost ascertainment: it deals with t
Firms need cash to invest in inventory, receivables and fixed assets and to create payments for operating expenses, so as to increase earnings and sales and make sure the smooth ru
Cost-volume relationship utilization Cost-volume-profit study is an estimating concept which can be employed in a variety of pricing circumstances. You can employ the cost-volu
Cash is a significant current asset for the operations of business. Cash is the fundamental input that maintains business running smoothly and continuously. In excess of cash and l
how much is this service?
Prepare two tables showing net profit, residual income and return on investment for each year of the project and also net present value (NPV) for: (i) The BEST OUTCOME; (ii) The
Various stages of product life cycle Typically the life cycle of a manufactured product will consist of the following stages: 1) market research : before any investment in
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