Practice - Creditors Turnover Ratio
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Practice Questions
Test your understanding with targeted questions
What does the Creditors Turnover Ratio indicate?
💡 Hint: Think about what paying suppliers quickly might mean for a business.
How is the Creditors Turnover Ratio calculated?
💡 Hint: Recall the formula we discussed in class.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What does a higher Creditors Turnover Ratio signify?
💡 Hint: Recall the implications of financial ratios discussed in class.
True or False: A lower Creditors Turnover Ratio indicates a company is managing its cash flow well.
💡 Hint: Think about what it means for a company to delay payments.
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Challenge Problems
Push your limits with advanced challenges
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.
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.
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