Practice Creditors Turnover Ratio - 1.4.3.3 | ICSE Class 12 Accounts – Chapter 5: Ratio Analysis | ICSE Class 12 Accounts
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1.4.3.3 - Creditors Turnover Ratio

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Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What does the Creditors Turnover Ratio indicate?

💡 Hint: Think about what paying suppliers quickly might mean for a business.

Question 2

Easy

How is the Creditors Turnover Ratio calculated?

💡 Hint: Recall the formula we discussed in class.

Practice 4 more questions and get performance evaluation

Interactive Quizzes

Engage in quick quizzes to reinforce what you've learned and check your comprehension.

Question 1

What does a higher Creditors Turnover Ratio signify?

  • Less financial management
  • Higher efficiency in payments
  • Lower liquidity

💡 Hint: Recall the implications of financial ratios discussed in class.

Question 2

True or False: A lower Creditors Turnover Ratio indicates a company is managing its cash flow well.

  • True
  • False

💡 Hint: Think about what it means for a company to delay payments.

Solve and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

Company Z has Current Assets of ₹800,000, Current Liabilities of ₹300,000, with Net Credit Purchases of ₹600,000 and Average Trade Creditors of ₹150,000. Analyze their Creditors Turnover Ratio in the context of liquidity.

💡 Hint: Understand how ratios inform you about cash flow and financial health.

Question 2

If Company Y’s Creditors Turnover Ratio has increased from 2 to 5 over two years, what could be some underlying reasons for this change? Discuss with examples.

💡 Hint: Think about both internal and external factors influencing financial practices.

Challenge and get performance evaluation