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Practice Questions
Test your understanding with targeted questions related to the topic.
Question 1
Easy
What is the formula for calculating the Debtors Turnover Ratio?
💡 Hint: Think about what two financial figures you need to compare.
Question 2
Easy
What does a higher Debtors Turnover Ratio indicate?
💡 Hint: Consider what collecting debts quickly means for a business.
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 is the Debtors Turnover Ratio used for?
- Measuring sales growth
- Assessing debt collection efficiency
- Calculating profit margins
💡 Hint: Consider what the ratio specifically measures.
Question 2
True or False: A higher Debtors Turnover Ratio indicates less efficient debt collection.
- True
- False
💡 Hint: Think about the efficiency implied by the higher number.
Solve and get performance evaluation
Challenge Problems
Push your limits with challenges.
Question 1
A company has debts of ₹300,000 and collects ₹60,000 monthly. Based on the Debtors Turnover Ratio, calculate how long it takes to collect all debts.
💡 Hint: Think about how many months it will take.
Question 2
If the average trade debtor is ₹120,000 and the Debtors Turnover Ratio is 6, what are the net credit sales?
💡 Hint: Rearrange the formula to find the missing variable.
Challenge and get performance evaluation