The following information is from the annual report of Thunderstruck Ltd:
Statement of financial position of Thunderstruck Ltd as at 31 December 201X

Income statement extract of Thunderstruck Ltd for the year ended 31 December 201X
$$\begin{array} { l r }
\text { Revenue } & 250 \
\text { Gross profit } & 75 \
\text { Operating profit } & 45 \
\text { Profit for the period } & 25
\end{array}$$
From the information provide above,calculate the debtors (trade receivables)ratio
A) 6.25 days
B) 58.4 days
C) 65.7 days
D) 16 days

Question

The following information is from the annual report of Thunderstruck Ltd:
Statement of financial position of Thunderstruck Ltd as at 31 December 201X

Income statement extract of Thunderstruck Ltd for the year ended 31 December 201X
$$\begin{array} { l r } 
\text { Revenue } & 250 \
\text { Gross profit } & 75 \
\text { Operating profit } & 45 \
\text { Profit for the period } & 25
\end{array}$$
From the information provide above,calculate the debtors (trade receivables)ratio
A) 6.25 days 
B) 58.4 days 
C) 65.7 days 
D) 16 days

Quizplus · Accepted Answer

The debtors (trade receivables) ratio can be calculated as follows:

Debtors (trade receivables) ratio = (Trade receivables ÷ Revenue) × 365

From the income statement extract, Revenue = 378,000

From the statement of financial position, Trade receivables = 77,507

Therefore, Debtors (trade receivables) ratio = (77,507 ÷ 378,000) × 365 = 74.82

Rounded to one decimal place, the answer is 58.4 days.

The Following Information Is from the Annual Report of Thunderstruck