SOLUTION
Case 1
Trade receivable turnover ratio = Net sales / Debtors + Bills receivable
Trade receivable turnover ratio = 4,00,000 / 1,00,000
= 4 Times
Case 2
Net Credit Sales = Total Sales − Cash Sales
= 30,00,000 − 6,00,000
= 24,00,000
Average Trade receivables = Opening Trade Receivables +Closing Trade Receivables / 2
Average Trade receivables = 2,00,000 + 600,000 / 2
= 4,00,000
Trade receivable turnover ratio = Net sales / Average Trade receivables
Trade receivable turnover ratio = 24,00,000 / 4,00,000
= 6 Times
Case 3
Cost of Goods Sold = 3,00,000
Gross Profit = 25% on Cost
Gross Profit = 25 / 100 × 3,00,000
= 75,000
Total Sales = Cost of Goods Sold + Gross Profit
= 3,00,000 + 75,000
= 3,75,000
Cash Sales = 20% of Total Sales
Cash sales = 3,75,000 × 20 / 100
= 75,000
Credit Sales = Total Sales − Cash Sales
= 3,75,000 − 75,000
= 3,00,000
Average trade receivable = Opening Trade receivables + Closing Trade receivables / 2
Average trade receivable = 50,000 + 1,00,000 / 2
= 75,000
Trade receivable turnover ratio = Net sales / Average receivables
Trade receivable turnover ratio = 3,00,000 / 75,000
= 4 Times
Case 4
Let Sales be = x
Gross profit = x × 20 / 100
Gross profit = 20x / 100
Sales = Cost of goods sold + Gross profit
Or. X = 4,50,000 + 20x / 100
Or, x – 20 / 100 = 4,50,000
Or, x = 4,50,000 × 100 / 80
x = 5,62,500
Sales = x = 5,62,500
Let Credit Sales be = a
Cash Sales = a × 25 / 100
= 25a / 100
Sales = Cash Sales + Credit Sales
Or, 5,62,500 = 25a / 100+a
Or, 5,62,500 = 125a / 100
Or, a = 5,62,500 × 100 / 125
a = 4,50,000
Credit Sales = a = 4,50,000
Average Trade receivables = Opening Trade Receivables + Closing Trade Receivables / 2
Average Trade receivables = 90,000 + 60,000 / 2
= 75,000
Trade receivable turnover ratio = Net sales / Average receivables
Trade receivable turnover ratio = 4,75,000 / 75,000
= 6 Times